Melbourne property market data, trends, forecasts

Melbourne property market news

The Melbourne property market has had a challenging 2022 so far. After the historic boom in 2021 which saw median Melbourne property prices surge by more than +15 per cent, the Victorian capital is now undergoing a significant correction which so far has resulted in a -5.6 per cent price fall from the February 2022 peak according to CoreLogic data. There may already be signs that the bottom is approaching, though, as those declines eased back slightly in September.

Melbourne property prices - September 2022

In a city where housing affordability has been a persistent issue, rising interest rates remain the primary driver of the downturn. As borrowing power decreases, buyers are approaching the market with a bit more caution and an eye for quality, creating more balanced market conditions between buyers and sellers when compared to last year's FOMO-driven boom. 

On the upside for sellers, Melbourne's auction clearance rates have been rising steadily from a low point in winter. New listings are up for the start of the spring selling season, but they remain below the long-term average, suggesting sellers are still hesitant to make their move in the rising rate environment. 

With a relative shortage of stock on the market, Melbourne's median days on market (DOM) is current 31 days, the same as it was 12 months ago, while the volume of successful sales is +4.6 per cent higher than a year ago.

Melbourne house prices

The house-led boom of 2021 saw Melbourne house prices shoot up to record highs before hitting their peak in February 2022. Houses in Melbourne are now declining in value faster than units, although losses haven't been as substantial as other markets like Sydney or Canberra. 

Melbourne house prices - September 2022

Melbourne's median house price fell -1.2 per cent in September to just under $940,000, bringing quarterly losses to just over -4 per cent. Annual growth is in a similar negative range, and with further rate increases expected in the coming months, Melbourne houses may still be a way above the market bottom. 

Top 5 Melbourne suburbs for first home buyers - houses

While Melbourne remains more affordable than Sydney, finding reasonably priced housing to suit first home buyers can be tricky. Here are a few of our top selections for Melbourne suburbs where you can still pick up a house below the city's median price. 

Top Melbourne suburbs under $900,000 house price

Melbourne unit prices

While house prices surged in 2021, Melbourne's median unit price increased at a softer rate as buyers followed a 'race for space' mentality and looked for larger homes or regional escapes. The positive now is that Melbourne unit owners are experiencing smaller drops in value as the downturn continues. 

Melbourne unit prices - September 2022

The median unit price in Melbourne declined by another -0.8 per cent in September but remained just over $600,000. Over the past three months, the -2.6 per cent correction was significantly more gentle than houses experienced, while annual growth is just below flat levels. An increase in demand for units due to upcoming immigration, a potential uptick in investor activity, and renewed interest from first home buyers looking for a cheaper alternative could continue to mitigate those price declines.  

Top 5 Melbourne suburbs for first home buyers - units

Units offer better affordability for first home buyers in Melbourne, although median prices are still substantial. Here are some of our top picks for Melbourne suburbs where you can buy below the median unit price. 

Top Melbourne suburbs under $600,000 unit price

Melbourne house prices graphs and charts

The latest chart pack from CoreLogic clearly demonstrates the rapid acceleration and subsequent deceleration of the Melbourne property market over the past 18 months.

The upturn during the 2021 boom was one of the most aggressive and significant periods of growth in Australian history. The downturn that's followed is, so far, comparable to the onset of the Global Financial Crisis back in 2008. 

Zooming out and looking at the wider context over the past 30 years, though, prices in Melbourne have seen incredibly strong increases. The below chart shows Melbourne house prices soaring well beyond every capital city save for Sydney, particularly since around 2013.

When taken into the perspective of even the past few years, Melbourne homeowners have experienced huge gains to the value of their properties.

While the market continues to cool, top agents are urging Melbourne sellers to be mindful of pricing properties realistically, carefully choosing the right method of sale, and when an incoming offer is the right one to take in order to secure the best possible outcome. 

Also, be aware that there is no one 'Melbourne property market' — consider that not every suburb is performing in the same way. Take a look at the Melbourne suburbs where property prices are still rising, in some cases by more than +40 per cent in Q2 2022. 

Get a better understanding of what selling now is really like by reading one of our OpenAgent colleague's recent experience of selling in a cooling market.

And get everything you need to answer the biggest question on sellers' lips: should I sell my house now or wait?