Hi,
A very big auction weekend with 831 auctions being reported to Domain. Of those, 610 sold, 150 passed in and 71 were withdrawn resulting in a solid clearance rate of 73%. In comparison, the same weekend last year produced a clearance rate of 58%.
Melbourne property has been a hot topic this year and interstate investors have been circling. Since 2020, the Melbourne property market has taken a hit. A number of things have contributed to this, harsh Covid lockdowns, downturn in the economy, the state government increasing land taxes, stricter compliance for rental property standards and then rising interest rates.
Since the lockdowns ceased at the end of 2021, the economy has been slowly recovering but then interest rates started to rise which stopped the recovery in the property market. In February 2025, the Reserve Bank handed down the first interest rate cut and then followed with two more interest rate cuts with the last being in August 2025.
Historically, the Melbourne property market has been one of the strongest performing markets in the country and after years of a lull, property prices are rebouding.
Why is Melbourne property appealing to investors?
In addition to declining interest rates, the underperforming property market has a lower median house price (lower entry price point) than Sydney, Brisbane and Canberra.
Population growth is strong, during the COVID-19 period, there was a population decline but this has strongly rebounded. In the year ending June 2024, the ABS states that Greater Melbourne’s population grew by 2.7% (142,637 people). The prediction for the year ending June 2025 is an increase of approximately 100,000 people.
Population growth has not just put pressure on property prices, but also rental demand. Investors buying a good quality property should have no issues in finding a tenant quickly.
Huge amounts of money have been put into infrastructure including roads, trains, hospitals and so on.
High quality education, not just at a tertiary level but also primary and secondary schools. This offers a good lifestyle for families and just another reason why Melbourne is great city to live.
Many research companies are predicting Melbourne to be the top-performing capital in 2026 including KPMG which is predicting Melbourne property prices to rise by 6.6%.
Spring is often a great time to buy with higher levels of stock (properties on the market) and off-market activity rises in late November and December leading into Christmas. This will likely present buyers with some better buying conditions leading into 2026.
Have a great week
Kim Easterbrook – Managing Director
