Prestige Melbourne Residential | Spring 2026 Report

Melbourne's prestige property market enters Spring 2026 with improving sales activity and continued demand across the upper end of the market. Prestige transactions have increased over the past year, homes are selling faster than they were 12 months ago and super-prestige sales above $5 million continue to gain market share. However, softer pricing conditions and forecasts for further value declines suggest buyers are benefiting from greater choice and negotiating power than in recent years.

Market snapshot
Melbourne recorded 1,143 prestige residential sales above $3 million in the year to Q2 2026, representing annual growth of 13%. The super-prestige market continues to strengthen, with properties above $5 million accounting for 34% of prestige sales, up from 23% a year ago. Super-prestige transaction volumes increased 68% over the past year, highlighting ongoing demand from high-net-worth buyers despite softer market conditions.

Prestige property prices
Melbourne prestige residential property prices declined 2.0% over the year to Q2 2026, with values also falling 0.5% during the most recent quarter. Prestige apartments continue to outperform prestige houses, recording five-year growth of 14.1% compared with just 0.9% for prestige houses. Looking ahead, McGrath Research forecasts Melbourne prestige property prices will decline by 7% by the end of 2026, followed by a further 1% contraction in 2027.

Prestige rental market
Prestige rental conditions remain undersupplied across Melbourne, with vacancy rates recorded at 2.7% at the end of Q2 2026. Prestige rents increased 3.5% over the past year, supported by limited luxury rental stock and steady tenant demand. Prestige apartments recorded stronger annual rental growth than prestige houses, while gross rental yields continued to improve. McGrath Research forecasts prestige rents will rise by a further 5% by the end of 2026 and 4% in 2027.

Economic drivers
Several economic and wealth creation trends continue to support Melbourne's prestige market. Australia's ultra-high-net-worth population grew by 32.5% between 2021 and 2026 and is forecast to increase by a further 58.5% by 2031. At the same time, Australia's share market delivered positive annual growth, supporting wealth creation and demand for premium residential property despite broader economic uncertainty and elevated interest rates.

Outlook for Melbourne prestige property
Melbourne's prestige property market is expected to face ongoing price pressure through the remainder of 2026 as economic challenges and affordability considerations continue to influence buyer behaviour. However, strong sales activity, growing super-prestige demand and an expanding ultra-wealthy population are expected to provide long-term support for the market. Tight rental conditions are also likely to contribute to further rental growth across the prestige sector.
Explore the full Spring report for detailed insights into prestige sales activity, luxury property values, rental market performance and the economic drivers shaping Melbourne's prestige property market.