M:
Research
Spring/26 Melbourne Residential
Headlines Melbourne recorded a higher number of residential sales over the past year, whilst homes are taking less time to sell than one year ago.
The number of residential rental homes in Melbourne is currently undersupplied. Melbourne rental vacancy was recorded at 2.7% at the end of Q2/26.
More Melbourne homes have been newly listed for sale than this time last year. Overall, the total number of homes listed for sale in Melbourne is up on last year.
Residential rents across Melbourne trended 1.7% above last year's weekly rate, with rents forecast to rise 4% at the end of 2026.
Melbourne residential property prices have trended 2.4% lower than a quarter ago, with 0.4% annual growth. Price change of -7% is forecast by the end of 2026.
The construction delivery of new homes in Victoria was 9.3% below a year ago, whilst the cost to build in Melbourne escalated 5.0%.
Economy Key drivers
Interest rate
Spring/26
4.60%
Interest rates were last set at 4.60% after the Reserve Bank of Australia (RBA) lifted the cash rate target by 25 bps in September 2026. At this time, most lenders adjusted their mortgage lending rates for homeowners and investors accordingly. By setting borrowing costs, interest rates strongly influence both housing affordability and demand for home loans. Westpac forecasts the cash rate target to be 4.60% at the end of 2026 whilst 4.10% in 2027, with inflation, energy costs and the global economy being closely monitored as a leading indicators for any possible adjustments during this time.
Population growth
5.0%
Unemployment
Melbourne's unemployment rate of 5.0% at the end of Q2/26, was tracking higher than the Australia average at 4.3%. Looking back, the five year average unemployment rate has been 3.9% across Australia. Employment conditions shape the ability for a household to enter the housing market and service mortgages over time, with a healthy labour market typically below 5%. With economic headwinds and technological disruption to a growing number of industries on the horizon, the RBA forecasts unemployment to soften to 4.7% by the end of 2027.
+2.0%
+5.0%
New build costs
Population growth has ramped up housing demand, placing pressure on existing housing supply and infrastructure. Melbourne's total population growth was 2.0% in 2025. This came after the population rebounded 2.6% in 2024, after growth had slowed to 1.1% in 2022, as a consequence of slower migration throughout the pandemic. The Australian Bureau of Statistics (ABS) have projected the long-term population growth for Melbourne at 1.8% per annum.
The construction delivery of new homes in Victoria was 9.3% below the last reported year, whilst residential building approvals trended 1.6% lower. Over this time, Melbourne house approvals were down 3.9% and apartment approvals were 13.1% lower. The cost to build in Melbourne escalated 5.0% in 2025 according to WT, which was below the 6.4% five year average. Considering the economic outlook, WT forecasts building escalation to lift by 4.8% in 2026 and rise 4.9% in 2027.
Economic outlook, Q2/26
2021
2022
2023
2024
2025
2026F
2027F
Interest rate target
0.10%
3.10%
4.35%
4.35%
3.60%
4.60%
4.10%
Economic growth in Australia
4.9%
3.3%
1.3%
1.2%
2.6%
1.5%
1.7%
Unemployment rate in Australia
4.0%
3.3%
3.8%
3.8%
3.9%
4.7%
4.7%
Population growth in Melbourne
1.1%
3.3%
2.6%
2.0%
1.8%
1.8%
1.8%
Building cost escalation in Melbourne
3.0%
9.5%
9.0%
5.5%
5.0%
4.8%
4.9%
Source: McGrath Research, RBA, WT, ABS, Westpac
2
Residential sales Update
Sales
Spring/26
+4%
Rolling tally of annual residential sales Melbourne
Melbourne recorded a higher number of residential sales over the past year. Sales trended up 4% with a total of 98,121 transactions in the year ending Q2/26, outpacing the five year annual average of 88,261 sales. A change in sales activity can be influenced by interest rates, economic confidence, housing supply, government policies and shifting population trends which impacts buyer demand. Isolating the 22,158 sales in the Q2/26 quarter, this was 1% above the previous quarter, whilst lower than the 22,287 five year quarterly average.
Source: McGrath Research, Cotality
Auctions
582 54.5%
In the last active week of Q2/26, 582 residential auctions were held across Melbourne. According to Cotality, 54.5% of these homes were sold under the hammer. Clearance rates above 70% suggest strong demand and a seller’s market, while a rate below 60% indicates weaker demand and a buyer’s market. This result was lower than 58.3% one quarter ago when 152 auctions were held. By comparison, the same quarter last year saw 68.2% homes sold, from 962 auctions.
Auction clearance rate Melbourne Source: McGrath Research, Cotality
Melbourne, Q2/26
Houses
Apartments
Residential
Number of homes sold in past quarter
14,027
8,131
22,158
Change from a quarter ago
-1%
4%
1%
Number of homes sold in past year
63,816
34,305
98,121
1%
11%
4%
Change from a year ago
Source: McGrath Research, Cotality
3
Residential sales, by local area Based on the geography boundary defined by the Local Government Area
Spring/26
Houses
Melbourne Q2/26
Number sold in past quarter
Change from a quarter ago
Apartments
Number sold in past year
Change from a year ago
Number sold in past quarter
Change from a quarter ago
Number sold in past year
Change from a year ago
Banyule
321
14%
1,314
0%
167
6%
738
12%
Bayside (Vic.)
241
-7%
1,105
1%
207
-8%
952
13%
Boroondara
435
-3%
1,987
-5%
403
1%
1,802
9%
Brimbank
494
8%
2,221
3%
184
6%
792
11%
Cardinia
436
-4%
1,982
1%
52
16%
235
-1%
Casey
1,290
-9%
6,327
5%
163
-13%
829
23%
Darebin
327
1%
1,509
4%
318
4%
1,375
14%
Frankston
447
-3%
2,072
-10%
210
-2%
1,021
9%
Glen Eira
255
-4%
1,100
-8%
405
22%
1,700
14%
Greater Dandenong
277
9%
1,292
5%
209
-1%
866
2%
Hobsons Bay
270
-2%
1,258
1%
148
40%
560
15%
Hume
889
-9%
4,469
11%
133
-5%
621
11%
Kingston (Vic.)
329
-1%
1,511
-3%
371
1%
1,633
12%
Knox
417
14%
1,715
-4%
185
-5%
863
15%
Manningham
336
21%
1,413
-1%
186
-2%
845
22%
Maribyrnong
230
12%
963
3%
264
8%
1,034
11%
Maroondah
280
1%
1,257
-2%
215
2%
1,028
8%
Melbourne
90
-6%
389
-14%
782
-4%
3,436
19%
Melton
879
-8%
4,423
12%
71
-12%
320
14%
Monash
424
5%
1,983
-3%
304
8%
1,328
9%
Moonee Valley
349
10%
1,576
9%
276
4%
1,135
16%
Moreland
452
11%
2,002
2%
546
11%
2,353
21%
Mornington Peninsula
665
-12%
3,020
-1%
162
-5%
739
16%
Nillumbik
177
1%
659
-1%
26
-7%
132
28%
Port Phillip
190
6%
825
-11%
670
4%
2,714
22%
Stonnington
190
-5%
862
-17%
460
14%
1,781
18%
Whitehorse
355
-1%
1,649
-3%
258
4%
1,129
12%
Whittlesea
892
6%
4,130
6%
165
13%
733
10%
Wyndham
1,356
-5%
6,649
2%
154
13%
647
22%
Yarra
244
3%
959
-6%
330
6%
1,329
20%
Yarra Ranges
489
-3%
2,034
-1%
107
8%
441
27%
Source: McGrath Research, Cotality
4
Residential sales Update
Sales velocity
Spring/26
-6 days
Average days on the market Melbourne
Melbourne homes are taking less time to sell than one year ago. Residential homes averaged 30 days on market in Q2/26, from the time they were listed, to the day they went under contract. This average duration was 30 days the quarter before (+0 days) and 36 days one year ago (-6 days). A lower number of days on market typically indicates that homes are selling more quickly, often reflecting strong buyer demand and well‑priced, desirable properties. In contrast, a higher number of days on market may signal slower buyer activity or that homes are priced above current market expectations. Looking back over the past five years, it has taken 31 days on average, to sell a home.
Source: McGrath Research, Cotality
New listings Melbourne
+4.3%
+17.4%
Total listings Melbourne
More Melbourne homes have been newly listed for sale than this time last year. Newly advertised listings in Melbourne were 4.3% higher in the month of June 2026 than the equivalent period last year, according to Cotality. This change in new listings trended above the Australian average of 2.1% and above the 2.0% across Australian capital cities.
Overall, the total number of homes listed for sale in Melbourne is up on last year. Melbourne's total number of listings in the month of June 2026 were 17.4% above the equivalent period last year, according to Cotality. By comparison, the Australian average change for total listings was 8.4% and across Australian capital cities was 15.9%.
Melbourne, Q2/26
Houses
Apartments
Residential
Number of days homes on market
30 days
30 days
30 days
Change from a quarter ago
+1 day
-1 day
+0 days
Change from a year ago
-5 days
-9 days
-6 days Source: McGrath Research, Cotality
5
Residential sales velocity, by local area Based on the geography boundary defined by the Local Government Area
Spring/26
Houses Number days on market
Change from a quarter ago
Banyule
30 days
Bayside (Vic.)
42 days
Boroondara
39 days
Melbourne Q2/26
Apartments Change from a year ago
Number days on market
Change from a quarter ago
Change from a year ago
-2 days
-5 days
29 days
-2 days
-8 days
+1 day
-6 days
37 days
+1 day
-9 days
+2 days
+2 days
35 days
+0 days
-4 days
Brimbank
28 days
+1 day
-13 days
28 days
-5 days
-17 days
Cardinia
34 days
+7 days
-1 day
22 days
+1 day
-7 days
Casey
25 days
+1 day
-11 days
25 days
+0 days
-17 days
Darebin
38 days
+0 days
-5 days
34 days
+1 day
-7 days
Frankston
20 days
+3 days
-3 days
16 days
+0 days
-9 days
Glen Eira
40 days
-1 day
-3 days
35 days
-2 days
-9 days
Greater Dandenong
29 days
+1 day
-7 days
27 days
-2 days
-9 days
Hobsons Bay
35 days
-6 days
-12 days
36 days
+0 days
-18 days
Hume
31 days
+0 days
-5 days
25 days
-3 days
-13 days
Kingston (Vic.)
28 days
+0 days
-9 days
32 days
+1 day
-9 days
Knox
25 days
+1 day
-1 day
32 days
+0 days
-2 days
Manningham
42 days
-7 days
-9 days
44 days
+4 days
+4 days
Maribyrnong
42 days
+0 days
-3 days
39 days
+2 days
-7 days
Maroondah
21 days
+2 days
-2 days
22 days
+0 days
-4 days
Melbourne
45 days
-1 day
-1 day
38 days
-2 days
-8 days
Melton
38 days
+0 days
-7 days
30 days
+4 days
-11 days
Monash
32 days
+0 days
-1 day
33 days
+0 days
-8 days
Moonee Valley
49 days
+0 days
-4 days
36 days
-1 day
-11 days
Moreland
36 days
-2 days
-6 days
32 days
+0 days
-9 days
Mornington Peninsula
40 days
-1 day
-21 days
34 days
-3 days
-19 days
Nillumbik
35 days
+7 days
-1 day
24 days
-1 day
-7 days
Port Phillip
40 days
-3 days
+4 days
35 days
-1 day
-7 days
Stonnington
31 days
-1 day
-1 day
32 days
+1 day
-5 days
Whitehorse
33 days
+1 day
-1 day
37 days
+2 days
-9 days
Whittlesea
34 days
+1 day
-2 days
27 days
-2 days
-7 days
Wyndham
39 days
+0 days
-10 days
40 days
+0 days
-13 days
Yarra
37 days
-3 days
-6 days
29 days
-1 day
-7 days
Yarra Ranges
24 days
+0 days
-12 days
22 days
+1 day
-11 days
Source: McGrath Research, Cotality
6
Residential prices Update
Median price
Spring/26
$851,600
Tracking median prices Melbourne
Melbourne residential property prices have trended higher than a year ago. Prices across Melbourne rose by 0.4% in the year ending Q2/26, with a 2.4% decrease recorded in the most recent quarter. As a result, the median residential value reached $851,600. Residential values shift with changes in interest rates, supply and demand, economic conditions, population trends and local infrastructure which influences market appeal and buyer capacity. Annual residential price growth has averaged 2.3% over the past five years.
Source: McGrath Research, Cotality
Price outlook
-7%
Forecast for median prices Melbourne
Looking ahead, Melbourne residential prices are likely to contract over the coming year. McGrath Research forecast Melbourne residential property prices to decrease by 7% at the end of 2026, followed by a 2% rise in 2027. Residential price forecasts consider borrowing capacity, the balance of supply and demand, economic conditions, population trends and local infrastructure which shapes affordability, demand and market direction.
Source: McGrath Research
Melbourne, Q2/26
Houses
Apartments
Residential
Median price
$951,800
$637,900
$851,600
Change from a quarter ago
-3.0%
-0.5%
-2.4%
Change from a year ago
-0.5%
3.2%
0.4% Source: McGrath Research, Cotality
7
Residential prices, by local area Based on the geography boundary defined by the Local Government Area
Spring/26
Houses
Melbourne Q2/26
Median price
Change from a quarter ago
Apartments Change from a year ago
Median price
Change from a quarter ago
Change from a year ago
Banyule
$1,319,700
-1.8%
1.7%
$794,300
0.8%
4.9%
Bayside (Vic.)
$2,122,800
-4.5%
-3.1%
$1,040,700
-0.2%
-1.1%
Boroondara
$2,388,500
-5.1%
-8.5%
$936,500
-2.7%
6.3%
Brimbank
$856,000
-1.3%
5.4%
$585,000
1.3%
4.1%
Cardinia
$1,221,200
-6.3%
-5.4%
$805,700
31.2%
28.7%
Casey
$920,900
-1.0%
3.8%
$695,100
-2.3%
15.2%
Darebin
$1,429,300
-4.3%
1.9%
$666,100
0.3%
6.1%
Frankston
$985,000
-3.8%
-0.1%
$697,000
-3.3%
3.0%
Glen Eira
$1,845,500
-4.2%
-0.5%
$730,100
-0.9%
0.0%
Greater Dandenong
$920,700
-2.0%
-0.5%
$656,700
-8.0%
-3.1%
Hobsons Bay
$1,081,400
-3.4%
-0.3%
$709,400
0.0%
4.3%
Hume
$827,000
-3.2%
-0.2%
$632,100
0.9%
12.5%
Kingston (Vic.)
$1,288,400
-4.2%
2.4%
$807,600
-1.5%
4.6%
Knox
$1,023,800
-4.7%
-4.0%
$727,300
-0.5%
4.5%
Manningham
$1,397,200
-11.9%
-7.5%
$981,500
-0.9%
1.1%
Maribyrnong
$1,054,000
-2.0%
6.6%
$588,900
-0.7%
5.8%
Maroondah
$1,054,500
-5.6%
-4.0%
$788,300
-1.6%
5.8%
Melbourne
$1,648,900
-8.9%
-1.9%
$598,700
0.1%
7.8%
Melton
$745,000
-0.3%
2.6%
$561,400
-3.1%
10.6%
Monash
$1,334,900
-5.4%
-2.0%
$806,200
0.6%
0.4%
Moonee Valley
$1,422,300
-2.6%
2.6%
$666,000
-1.0%
3.6%
Moreland
$1,115,800
-5.2%
0.1%
$634,800
-1.2%
2.7%
Mornington Peninsula
$1,439,000
-5.7%
-9.6%
$814,600
-0.8%
-3.2%
Nillumbik
$1,644,000
-8.8%
7.9%
$1,023,900
-0.2%
20.3%
Port Phillip
$2,061,000
-0.8%
1.8%
$668,100
-0.7%
0.6%
Stonnington
$2,552,900
-12.4%
-6.2%
$758,700
4.4%
7.2%
Whitehorse
$1,385,500
-5.9%
-6.3%
$830,200
-1.9%
4.5%
Whittlesea
$822,900
-1.7%
-1.2%
$582,400
-5.5%
7.1%
Wyndham
$771,700
-0.6%
3.3%
$519,500
-8.3%
3.2%
Yarra
$1,552,800
-1.2%
-1.4%
$741,400
1.8%
3.5%
Yarra Ranges
$1,001,800
-1.6%
-1.5%
$774,000
5.8%
12.7%
Source: McGrath Research, Cotality
8
Residential rents Update
Vacancy
Spring/26
2.7%
Residential rental vacancy Melbourne
The number of residential rental homes in Melbourne is currently undersupplied. Melbourne rental vacancy was recorded at 2.7% at the end of Q2/26, rising 20 bps in the quarter whilst rising 20 bps over the past year according to REIA. Generally, around 3% vacancy is considered a balanced market between rental supply and demand. Below this equilibrium is considered to be an undersupplied pool of rental homes, which places upward pressure on weekly rents. For the past five years, Melbourne residential rental vacancy has averaged 3.2%.
Source: McGrath Research, REIA
Yield
-26 bps
Gross rental yield Melbourne
Melbourne gross rental yields have trended lower over the past year. Residential yields fell 18 bps in the Q2/26 quarter to be 3.65% across Melbourne, whilst 26 bps lower compared to a year ago. A yield pushing beyond 4% is more desirable for investment properties located in capital cities, while below this, tends to show higher property values relative to rental income. Melbourne gross rental yields have averaged 3.37% over the past five years.
Source: McGrath Research, Cotality
Melbourne, Q2/26
Houses
Apartments
Residential
Gross rental yield
3.12%
4.79%
3.65%
Change from a quarter ago
-28 bps
+4 bps
-18 bps
Change from a year ago
-41 bps
+5 bps
-26 bps Source: McGrath Research, Cotality
9
Residential rents Update
Median weekly rent
Spring/26
$585
Tracking median weekly rents Melbourne
Residential rents across Melbourne trended above the weekly rate recorded a year ago. Melbourne rents rose 0.9% in Q2/26, whilst increasing 1.7% over the past year, to stand at a median $585 per week. Rent changes are driven by rental supply, tenant demand, migration trends, economic conditions and investor activity which together impact the vacancy rate. For the past five years, Melbourne rents grew an average 6.4% per annum.
Source: McGrath Research, Cotality
Rental outlook
+4%
Forecast for median rents Melbourne
The Melbourne residential market is continuing to experience upward pressure on weekly rents. McGrath Research forecast Melbourne rents to rise 4% at the end of 2026, with a further 5% rise likely in 2027. The rental forecast takes into consideration new and existing supply levels, population changes, economic conditions and upgraded local infrastructure which can influence future tenant demand, vacancy rates and rental growth.
Source: McGrath Research
Melbourne, Q2/26
Houses
Apartments
Residential
Median weekly rent
$580
$590
$585
Change from a quarter ago
0.0%
1.7%
0.9%
Change from a year ago
0.0%
5.4%
1.7% Source: McGrath Research, Cotality
10
Residential rents, by local area Based on the geography boundary defined by the Local Government Area
Spring/26
Houses Median weekly rent
Change from a quarter ago
Banyule
$680
Bayside (Vic.)
$1,160
Boroondara
Apartments Change from a year ago
Median weekly rent
Change from a quarter ago
Change from a year ago
0.0%
4.6%
$580
0.9%
5.5%
0.0%
11.5%
$715
1.4%
7.5%
$1,060
3.4%
21.1%
$630
0.0%
3.3%
Brimbank
$540
0.0%
1.9%
$480
-1.0%
2.1%
Cardinia
$605
0.8%
0.8%
$525
1.9%
5.0%
Casey
$610
0.8%
1.7%
$540
0.9%
4.9%
Darebin
$760
2.7%
16.0%
$545
2.8%
4.8%
Frankston
$635
1.6%
4.1%
$540
1.9%
4.9%
Glen Eira
$895
-0.6%
31.6%
$605
2.5%
7.1%
Greater Dandenong
$605
2.5%
7.1%
$545
2.8%
4.8%
Melbourne Q2/26
Hobsons Bay
$655
2.3%
5.6%
$560
3.7%
6.7%
Hume
$540
0.0%
0.0%
$500
2.0%
5.3%
Kingston (Vic.)
$765
3.4%
7.7%
$615
3.4%
7.9%
Knox
$655
2.3%
5.6%
$610
2.5%
5.2%
Manningham
$830
3.1%
5.7%
$670
1.5%
6.3%
Maribyrnong
$665
3.9%
7.3%
$530
1.0%
3.9%
Maroondah
$670
-1.5%
4.7%
$595
3.5%
4.4%
Melbourne
$845
1.2%
25.2%
$635
0.8%
5.0%
Melton
$495
1.0%
0.0%
$455
3.4%
3.4%
Monash
$690
1.5%
5.3%
$640
0.8%
5.8%
Moonee Valley
$715
3.6%
12.6%
$585
2.6%
5.4%
Moreland
$685
1.5%
9.6%
$555
0.9%
4.7%
Mornington Peninsula
$730
-0.7%
5.0%
$570
1.8%
3.6%
Nillumbik
$715
2.9%
6.7%
$640
0.8%
8.5%
Port Phillip
$980
-0.5%
41.0%
$610
2.5%
6.1%
Stonnington
$1,060
1.0%
35.0%
$630
2.4%
5.0%
Whitehorse
$695
0.7%
3.7%
$640
1.6%
5.8%
Whittlesea
$550
0.0%
1.9%
$490
1.0%
2.1%
Wyndham
$510
-1.0%
-6.4%
$460
1.1%
-1.1%
Yarra
$890
1.7%
14.8%
$630
1.6%
4.1%
Yarra Ranges
$660
0.8%
0.0%
$600
1.7%
6.2%
Source: McGrath Research, Cotality
11
Definitions
Melbourne Melbourne refers to the Greater Capital City Statistical Area or ‘Greater Melbourne’ as defined by the Australian Bureau of Statistics (ABS).
Local Government Area A Local Government Area (LGA) is a defined geographic region administered by a local council responsible for community services, planning, and local regulations.
Interest rate target The cash rate target is the interest rate set by the Reserve Bank of Australia to influence borrowing costs, economic activity, and inflation across the economy.
Economic growth Economic growth is the rise in a country’s production of goods and services over time, reflecting how much the economy is expanding.
Unemployment The unemployment rate measures the share of people in the labour force who are willing and able to work but currently without employment.
Population growth Population growth increases the number of people needing homes, boosting housing demand and influencing supply, prices, and future development needs.
Sales Sales of residential homes refers to the number of houses or apartments sold within a specific area and time period, most commonly being reported within the quarter or year.
Auction clearance rate Auction clearance rates show the percentage of properties sold at auction compared with those taken to auction over a given period.
Sales velocity The length of time a property spends on the market from listing to exchange, with the duration measurement represented as being number of days.
Listing New listings are recently advertised homes, while total listings represent all properties currently for sale in the housing market at a given time.
Median price The median price is the midpoint of all property sale prices, where an equal number of homes sell above and below that value.
Vacancy Total residential vacancy refers to the proportion of rental properties unoccupied and available for tenants at a specific point in time.
Yield Gross rental yield is the annual rental income of a property divided by its market value, showing the return before expenses.
Median weekly rent Median weekly rent is the midpoint of all weekly rental prices, with half of properties renting for more and half for less.
Guiding you home
Michelle Ciesielski National Head of Research, McGrath Research www.mcgrath.com.au/research
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