Melbourne Spring 2026 Property Market Report

Melbourne's property market enters Spring 2026 with conditions continuing to stabilise after a prolonged period of subdued growth. Annual sales activity has improved, homes are selling faster than they were a year ago and population growth remains strong. However, rising listing volumes, soft quarterly price movements and forecasts for further value declines suggest buyers are gaining greater negotiating power across many parts of the market.

Market snapshot

Melbourne recorded 98,121 residential property sales in the year to Q2 2026, representing annual growth of 4% and exceeding the five-year average. Homes are taking an average of 30 days to sell, six days faster than a year ago, reflecting improved market activity and buyer engagement. At the same time, new listings increased 4.3% year-on-year, while total listings rose 17.4%, creating greater choice for buyers across the city.

Property prices

Melbourne's median residential property value sits at $851,600, up 0.4% over the past 12 months. However, values declined 2.4% during the most recent quarter, highlighting softer market conditions. McGrath Research forecasts Melbourne residential property prices will decline by 7% by the end of 2026 before recovering with 2% growth in 2027 as affordability, interest rates and supply conditions continue to influence housing demand.

Rental market

Rental conditions remain tight across Melbourne, with vacancy rates recorded at 2.7% at the end of Q2 2026, below the level generally considered a balanced market. Median weekly rents increased 1.7% over the past year to $585 per week, supported by ongoing population growth and constrained rental supply. Looking ahead, rents are forecast to rise by 4% by the end of 2026 and a further 5% in 2027.

Economic drivers

Strong population growth and constrained housing supply continue to influence Melbourne's property market. Population growth reached 2.0% in 2025, increasing demand for both owner-occupier and rental housing. At the same time, new home completions across Victoria were 9.3% lower than a year earlier, while building approvals also declined. Construction costs increased 5.0% during 2025, adding further pressure to housing delivery and supply.

Outlook for Melbourne property

While Melbourne continues to benefit from strong population growth and improving sales activity, market conditions are expected to remain challenging in the short term. McGrath Research forecasts residential property values will decline by 7% through 2026 as affordability pressures and borrowing costs temper buyer demand. Despite this outlook, longer-term fundamentals remain supported by population growth, limited housing supply and a rental market that continues to experience undersupply.

Explore the full Melbourne Spring report for detailed insights into sales trends, housing supply, property values and rental market performance across Greater Melbourne.