Melbourne’s property market has lagged behind other Australian capitals over the past 12–18 months, with softer price growth and longer selling times. While cities like Brisbane, Perth and Adelaide have surged, Melbourne has faced a mix of structural and cyclical headwinds.
A key factor is increased housing supply. Melbourne continues to deliver more stock than most capitals, giving buyers greater choice and limiting price growth. Population recovery also lagged post-pandemic compared to northern states, where strong interstate migration fuelled demand.
Investor sentiment has been another major influence. Higher land tax, rising holding costs and increased regulation in Victoria have prompted many local investors to sell down their portfolios, reducing competition across key price segments.
However, this shift is creating opportunity. Interstate investors are increasingly targeting Melbourne, recognising value in a market that has underperformed relative to the rest of Australia. Compared to other capitals, pricing appears more attractive, particularly given Melbourne’s long-term fundamentals.
Higher interest rates and affordability constraints have also tempered buyer activity, contributing to more cautious negotiations.
Despite current conditions, Melbourne remains well positioned for recovery, supported by strong population growth, significant infrastructure investment and its status as one of Australia’s most liveable cities.
