Melbourne Winter 2026 Property Market Report

Melbourne’s residential property market is showing steady activity, with rising sales volumes, faster selling times and ongoing rental demand. The Winter 2026 Melbourne Residential Property Report highlights a balanced market, supported by population growth, constrained supply and consistent buyer interest across the city.

For buyers, investors and owner‑occupiers, Melbourne real estate continues to offer long‑term value, stable pricing conditions and steady rental performance in a tightening market environment.

Sales activity strengthens across Melbourne
Residential sales across Melbourne increased 12% over the past year, reaching 101,503 transactions and trending above the five‑year annual average.


This uplift reflects improving buyer confidence, supported by population growth, economic conditions and evolving market dynamics.


At the same time, homes are selling faster, with average days on market falling to 30 days, highlighting sustained demand and well‑priced stock.

Supply constraints shaping market conditions
Housing supply across Melbourne remains constrained, with new listings falling 3.4% year‑on‑year and total listings down 1.4%.


Population growth of 2.0% in 2025, with a long‑term forecast of 1.8% annually, continues to drive housing demand and place pressure on supply.


Construction delivery remains below previous levels, down 10.6% year‑on‑year, contributing to ongoing supply limitations.

Moderate price growth with stable outlook
Melbourne residential property prices increased 4.6% over the past year, bringing the median residential value to approximately $872,800.


While recent quarterly movement showed a modest decline of 0.6%, overall price trends remain stable.


Looking ahead, McGrath Research forecasts no price growth in 2026, followed by a slight decline of 2% in 2027, reflecting a period of stabilisation.

Rental market remains undersupplied
Melbourne’s rental market continues to face undersupply, with vacancy rates at 2.5%, below the balanced benchmark of 3%.

Rental prices increased 1.8% year‑on‑year to a median of $580 per week, reflecting steady tenant demand.

Rental growth is forecast to strengthen, with rents expected to rise 5% in 2026 and a further 4% in 2027.


Gross rental yields currently sit at 3.83%, offering stable returns for investors despite slight compression over the past year.

Economic fundamentals influencing demand
Melbourne’s housing market is supported by strong population growth and underlying economic activity, although borrowing costs remain elevated.


The cash rate is currently 4.35%, influencing affordability and lending conditions across the market.


Unemployment sits at 5.3%, slightly above the national average, which may impact household borrowing capacity over time.

Outlook for Melbourne property in 2026
With rising sales activity, constrained supply and continued rental demand, Melbourne’s property market is positioned for stability over the coming year.


For buyers and investors, the market offers a balanced mix of opportunity and long‑term value, particularly as population growth and limited housing supply continue to shape conditions.

Explore the full Melbourne Winter 2026 Property Report for detailed insights into sales trends, pricing and rental performance across the city.