Melbourne house price growth stagnates as market lags major rivals – realestate.com.au

Melbourne house prices are as much as $59,300 better off at the end of spring than last year, when the city’s typical home value rose to $1,015 million in November.

But the city’s growth rate is slowing, with an increase of 0.3 percent in the past month adding just a few thousand dollars, resulting in the city being overtaken by every other major capital except Darwin and Hobart.

In Sydney, Brisbane, Adelaide and Perth, house prices have risen anywhere between $103,000 and $142,300 in the past year – and a spring misstep by sellers could be the reason for the difference.

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Melbourne’s typical unit price rose by $22,000 to $626,000 in the 12 months to the end of November, but saw the smallest increase in the country last month at around $500.

PropTrack senior economist Eleanor Creagh said more choice for homebuyers in the spring had been enough to limit the more recent pace of growth.

“We have seen the growth rate slow in November compared to last month in Melbourne, with a large increase in new listings in October,” Creagh said.

She added that with unexpectedly high inflation data released last week and almost guaranteeing no further rate cuts this year, Melbourne was likely to end the year with fairly modest growth.

“The extended interest rate pause may dampen momentum in the pace of price growth, but I don’t think Melbourne will return to a price reversal,” Creagh said.

PropTrack senior economist Eleanor Creagh says Melbourne’s growth has slowed compared to other major capital cities. Photo: John Gass.

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Good news for first home buyers is that the Victorian capital will be one of the most affordable in the country for a long time – attracting less investor activity than others.

“Prices in Brisbane and Adelaide are still rising much faster than Melbourne, especially this month,” Creagh said.

“Brisbane’s monthly growth was three times as fast, and Adelaide’s was almost five times as fast. So if current trends continue, Melbourne won’t necessarily gain ground, but values ​​will continue to rise.”

The economist added that this year’s more modest increase in investor activity, compared with other states, likely reflected Victoria’s higher land tax costs and an overall more favorable market for renters.

Both factors have been heavily influenced by Allan’s government policies.

The Victorian government’s interventions in the state’s housing market are part of the reason house value growth here has lagged behind that of the country. Photo: NewsWire/Luis Enrique Ascui

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“Although based on the relative affordability that Melbourne currently offers and the fact that the state is expected to have the strongest population growth until 2030, for some we are likely at a point where land tax increases may be offset by the fact that values ​​are relatively affordable,” Ms Creagh said.

Ray White Victoria head auctioneer Luke Banitsiotis said as well as an increase in the number of homeowners selling in the spring, there was also an increase in the number of landlords looking to sell homes before the next land tax bill at the end of the year.

Mr Banitsiotis said the result was a balanced market where homes were selling, giving confidence to more owners considering putting their homes on the market, without buyers being priced out quickly.

Auctioneer Luke Banitsiotis believes the Melbourne market is relatively well balanced, setting the tone for reasonable growth – but not a boom.

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“The market was somewhat in favor of sellers, but not a boom market,” he said.

“Because buyers have a bit more choice, the deals are not all completed on the day, but are done within a week or two of it.”

Ms Creagh said that in 2026, continued limited housing supply issues, as well as further population growth, would continue to favor sellers and price increases across the country.

“Overall, it looks like prices will rise further over the summer, although the extended interest rate pause and APRA (Australian Prudential Regulation Authority) cap on high debt/income loans are likely to dampen momentum in the first half of 2026, so we could see the growth rate slow slightly.”

The PropTrack report also shows many parts of regional Victoria are doing better than Melbourne, with the state’s north-west around Mildura being the top earner last year after the average house price rose 9.67 per cent to $400,000.

Bendigo is also up after rising 9.41 per cent in the past 12 months, and Ballarat is also 8.26 per cent better off.

In contrast, the best-performing urban area, Melbourne’s northwest, gained 6.76 per cent, bringing the average house price to $761,000.

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