Melbourne has had a tough few months. In the words of our senior buyers agent Brad Straughair, the last three months have been “pretty ordinary”. But look a little closer and there’s a clear story in the numbers, along with some real opportunity for buyers who know where to look.
Brad is part of PMC’s new Melbourne team, working with buyers from our office in Yarraville. In this Melbourne property market update, he shares what the data shows and what it actually feels like on the ground this spring.
Melbourne property values are still softening
Cotality’s Melbourne all-dwellings index fell 1.1% in August, following another decline in July. Over the August quarter, Melbourne dwelling values were down approximately 3.6%.
“Over the past three months, Melbourne is not experiencing growth. Houses are in a fairly pronounced correction, while apartments are proving considerably more defensive.”
– Brad Straughair
Why Melbourne houses are falling faster than units
The most useful comparison right now is by property type. PropTrack estimates Melbourne houses are about 6.3% below their peak, while units are only about 2.2% below theirs. That’s a big gap, and Brad says it’s probably the clearest statistic showing what’s happening in the market right now.
The main driver is affordability. Higher interest rates have reduced how much people can borrow, so many buyers are moving down the price range. That gives apartments and lower-priced homes a real advantage.
REIV’s latest data shows the split clearly. In July, Melbourne’s median house price was $900,000, down 4.3% over the month, while the median unit price was $638,000, actually up 1.3% over the month.
More listings mean more choice for buyers
There’s also a lot of property for sale. Melbourne had 50,867 properties listed in July, a historic high and 42.8% more than in July 2025. For buyers, particularly those looking at houses, that means considerably more negotiating power.
Why different reports show different numbers
If you follow the property news, you’ve probably noticed different sources reporting quite different monthly figures. Brad explains that’s because they measure different things:
- REIV reports median sale prices, which can move sharply depending on the mix of properties that sold that month.
- Cotality and PropTrack use value indices, which are generally a better guide to the underlying change in property values.
When it comes to knowing whether Melbourne property has actually gone up or down in value, Brad puts more weight on the value indices. It’s a good reminder not to make big decisions based on one headline.
What it’s like on the ground
“It’s a struggle out there for selling agents, with vendor expectations (although starting to move) still out of alignment with the lighter appetite of buyers to purchase.”
Auction numbers usually dip through winter and then pick up towards the end of August and into early spring. That lift is happening, but numbers are still well below what we’d normally expect. Clearance rates are also well under the norm and fewer results are being reported.
What’s next for the Melbourne property market
We expect Melbourne to stay subdued in the short term, with affordability playing a bigger and bigger role. Vendor expectations are slowly shifting, which should help more deals come together.
“We still have a strong belief that Melbourne is undervalued and in a bit of a holding bay until after the state election in late November of this year.”
The Victorian election in November will be an important factor to watch as we look towards 2027. Brad doesn’t expect any flow-on effect for the property market to show up until February 2027 at the earliest. For buyers, that makes the months ahead a chance to buy with less competition and more choice.
Tips for buying in Melbourne right now
- Use the extra choice. With listings at record levels, take the time to compare properties and don’t feel rushed.
- Look beyond the asking price. With vendor expectations still adjusting, a well-researched offer backed by recent sales can go a long way.
- Consider units and townhouses. They’ve held their value better and can be a smart way into a sought-after suburb.
- Keep an eye on auction results. Properties that are passed in often lead straight into negotiation.
Frequently Asked Questions
Are Melbourne house prices falling?
Yes. Cotality recorded a 1.1% fall in August and around 3.6% over the quarter. PropTrack estimates Melbourne houses are about 6.3% below their peak, while units are about 2.2% below.
Is Melbourne property undervalued?
Our Melbourne team believes it is, and that the market is in a holding pattern until after the Victorian state election in late November.
Should I buy a house or a unit in Melbourne?
Units have been more resilient, while houses may offer more room to negotiate. The right choice depends on your goals, budget and how long you plan to hold.
Why do Melbourne property reports show different numbers?
REIV reports median prices, which move with the mix of homes sold, while Cotality and PropTrack track underlying changes in value.
Thinking about buying in Melbourne?
Have a chat with Brad and Tom from our Melbourne team based in Yarraville. We’d love to hear what you’re looking for and help make buying simple and stress-free.
Contact us today for a confidential discussion and let’s make your dream home a reality.