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Disclaimer

This blog is for general information purposes only and is not intended to be financial, legal, or tax advice. The content has been prepared without taking into account your individual objectives, financial situation, or needs. We strongly recommend speaking with a licensed financial adviser, accountant, or legal professional before making any investment decisions. Bridge Projects Group does not provide financial advice and is not licensed to do so.

Melbourne Housing Market Update: June 2025

  • Wealthprint Property Advisory
  • Jun 16
  • 3 min read

By Wealthprint Property Advisory


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Melbourne is officially back in growth mode, notching up its fourth consecutive month of housing value increases. While the recovery is still cautious, the signals are clear: buyer sentiment is improving, interest rate conditions are easing, and supply remains tight.


Together, these factors are contributing to the early stages of what many believe is Melbourne’s next growth cycle.



State vs State: Why We’re All-In on Melbourne


When comparing capital city markets across Australia, Melbourne currently offers some of the strongest value.


According to CoreLogic and Cotality data (June 2025):

  • Melbourne Median Dwelling Value: $791,303

  • Sydney: $1.14 million

  • Brisbane: $840,000+


Despite a modest 1.2% rise over the past three months, Melbourne home values are still 4.5% below their March 2022 peak

This positions Melbourne as the most affordable major capital on the east coast, and arguably the most undervalued when adjusted for income, infrastructure and long-term demand drivers.

By contrast:


  • Brisbane has already surged more than 50% since 2020

  • Sydney remains out of reach for many buyers


Melbourne’s relative affordability, combined with its population size and infrastructure pipeline, makes it a standout for investors looking for both yield and capital growth.

Melbourne is now considered the most undervalued major capital city on the eastern seaboard.

What’s Driving the Melbourne Market?


  1. Interest Rate Cuts Are Working

    February’s rate cut and expectations of more to come have lifted buyer confidence and borrowing power


  2.  Rental Pressure

    Despite some softening in growth, rental yields remain attractive.

    • Melbourne units: 4.9% yield

    • Melbourne houses: 3.2% yield


  3. Government Incentives

    First home buyer support schemes and deposit guarantees are helping new entrants into the market.


  4. Clearance Rates Rebounding

    May’s interest rate cut helped push Melbourne’s auction clearance rate to 65.1%, the highest since July 2024.

    By June, REIV reported clearance rates holding steady at 64.3%, indicating consistency and growing demand.


  5. Auction Activity Rising

    CoreLogic recorded 2,120 Melbourne auctions in May, up from 1,860 in April — a 14% month-on-month lift, confirming increased vendor confidence.


  6.  Tight Listings

    Stock levels are:

    • 4.5% lower than a year ago

    • 1.3% below the five-year average

    This is placing upward pressure on prices.


  7. Buyer Activity Rising

    According to REIV data, auction volumes in Melbourne increased by 8.6% in May compared to the same time last year, indicating growing vendor confidence and stronger buyer engagement.


  8. New Loan Commitments

    ABS lending indicators show a 6.1% rise in owner-occupier loans in Victoria in the past two months, suggesting greater activity across the entry-to-mid market.



 Long-Term Performance


Melbourne’s average annual capital growth over the past decade remains steady at 3.6%.

However, with the current affordability gap and improving economic outlook, analysts expect that number to lift heading into 2026.


When structured correctly, these techniques can create a cash flow advantage that helps reduce non-deductible debt (your home loan) faster — without changing your income or lifestyle.


Not All Properties Are Equal


While the market is improving, not every property will perform well.

Buyer competition is heating up, and so are asking prices. In some pockets, vendors are overpricing assets that lack fundamentals such as:

  • Owner-occupier appeal

  • Low-maintenance build quality

  • Strong rental performance

The right suburb + the right design + the right numbers = long-term results.

That’s why at Wealthprint, we remain focused on:

  • Data-led

  • Cash flow-positive

  • Depreciation-friendly opportunities


Especially in suburbs undergoing:

  • Gentrification

  • Strong infrastructure growth

  • Low vacancy rates


We also analyze:

  • Local demographic shifts

  • Infrastructure and rezoning plans

  • Comparable rent demand vs supply

  • Historical suburb performance under similar macro conditions


Outlook for the Rest of 2025


Research from Cotality and others predicts modest growth across Melbourne’s housing market through the remainder of 2025.

It’s not a boom, but a return to healthy, sustainable growth.


Supporting Factors:


Continued rate easing by the RBA

  • Stable inflation projections (2–3% target range)

  • Improved affordability compared to other capitals

  • Infrastructure delivery and population momentum

  • Increased auction volumes and clearance rates


Challenges Ahead:


  • Loan serviceability remains stretched

  • APRA oversight limits high debt-to-income borrowers

  • Wage growth still lags behind housing cost increases


Final Word: A Window of Opportunity


Smart investors know:

The best time to act is before the momentum becomes obvious to everyone else.

With:

  • Listings still tight

  • Competition slowly returning

  • Prices yet to reclaim their highs


Melbourne offers a unique opening — but only for those who buy smart.

If you're thinking about entering (or re-entering) the market, remember:

It’s not just when you buy — it’s what you buy.

Book Your Strategy Call

Let us help you find a property that performs.



 
 
 

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