Melbourne: Australia's Most Affordable Major City Housing Market

6

Since the onset of the COVID-19 pandemic in March 2020, Melbourne's dwelling values have shown a modest 20% increase. In contrast, increases elsewhere in Australia include 42% in Sydney, 96% in Brisbane, and over 90% in both Perth and Adelaide. Consequently, Melbourne's median dwelling value now stands at $830,000, making it the most affordable among Australia's five major capitals, and significantly lower than the combined average.

This affordability is a contrast to Melbourne housing trends over the last two decades. However, experts forecast a potential shift. KPMG predicts robust price growth for Melbourne, expecting it to outpace the national average in 2026 with an anticipated growth rate of 6.6%, driven by escalating interest from savvy investors.

The city is attracting high-income investors beyond its borders, particularly from Western Australia. Buyer advocate Arin Russell notes that both first-time buyers and seasoned investors are seeking opportunities in Melbourne, keen to invest before an expected market upswing.

Despite the economic challenges facing Victoria, including significant state debt and rising crime in Melbourne, the city's current affordability presents a unique opportunity for buyers. As KPMG's chief economist Brendan Rynne suggests, the unit market might see the most considerable gains due to its favourable affordability.

As Melbourne prepares to potentially lead the national housing price growth, its current market presents an attractive proposition for bargain hunters eyeing considerable returns in the near future.

Published:Wednesday, 3rd Sep 2025
Source: Paige Estritori

Share this news item:

Finance News

Clear

US Economy's Slowdown Triggers Market Rally as Fed Rate Cuts Loom

05 Sep 2025: Paige Estritori

The latest release of the US jobs opening data and the Federal Reserve's Beige Book indicates signs of a slowing American economy. While reasons range from the current government's economic policies to broader market challenges, the outcomes have intrigued Wall Street and bond markets alike. This weakening scenario has set a stage where the Fed might consider cutting interest rates sooner than expected, contributing to a market rally. - read more

Melbourne: Australia's Most Affordable Major City Housing Market

03 Sep 2025: Paige Estritori

Recent data from PropTrack highlights Melbourne as the most affordable major capital city in Australia for housing, as it continues to record the slowest dwelling value growth compared to other state capitals. Over the year leading up to August, Melbourne's property prices increased by merely 2.1%, starkly overshadowed by the growth rates in cities like Sydney, Brisbane, Perth, and Adelaide. - read more

ASX Plummets Amidst Trump’s Inflation Remarks

02 Sep 2025: Paige Estritori

The Australian stock market experienced significant turbulence following remarks by U.S. President Donald Trump regarding domestic inflation. In his statements, Trump asserted that inflation was 'way down,' which precipitated a notable sell-off in Australian equities, with investors seeking refuge in safer assets like gold and silver. - read more

Labor's Homebuyer Scheme Could Boost Prices by Up to $90,000

02 Sep 2025: Paige Estritori

The Labor government's newly expanded low deposit homebuyer scheme is projected to significantly impact the housing market by next year. A recent analysis by Lateral Economics suggests that this initiative could propel house and apartment prices to rise by as much as $90,000 within a year. - read more

RBA Adjusts Productivity Expectations Amid Tax Reform Debates

01 Sep 2025: Paige Estritori

The Reserve Bank of Australia (RBA) has revised its productivity growth assumptions after years of holding out against such adjustments. Notably, this change has not led to increased inflation forecasts nor the anticipation of stricter monetary policies. The RBA's new approach suggests that lower productivity growth will dampen both supply and demand, primarily due to a decrease in income growth. - read more

Pressures Mount as Australian Wage Growth Slows

28 Aug 2025: Paige Estritori

Australian real wages have hit a challenging plateau, currently trailing 6.1% below their mid-2022 'covid-bubble' heights. The Reserve Bank of Australia's (RBA) recent Statement of Monetary Policy provides little solace, projecting that real wages will stay 5.5% beneath their peak by the close of 2027. This comes amidst SEEK's latest advertised salaries index, which paints a picture of slowing wage growth. - read more

Unexpected Inflation Surge Puts RBA Rate Cut on Hold

28 Aug 2025: Paige Estritori

The latest inflation figures from the Australian Bureau of Statistics have disrupted expectations for a rate cut by the Reserve Bank of Australia (RBA) in September. July's monthly CPI inflation escalated to an annual rate of 2.8%, rising significantly from June's 1.9% and outstripping forecasts from multiple market analysts. This unexpected inflationary surge is mainly attributed to a dramatic 13.0% hike in electricity prices and robust travel costs. - read more

Click for more Finance News