Understanding the 2025 Melbourne Property Market

REAL STORIES

The Melbourne property market has been overshadowed by other Australian capitals in recent years, but we are starting to see clear signs of recovery.

Our dedicated team at MRE has compiled a straightforward breakdown of what’s changing, why, and what buyers and investors need to know as we prepare for 2025.

The Market is Gearing Up for Growth

While Melbourne has trailed behind, the fundamentals for a comeback show strength:

A resilient economy: Melbourne’s diverse industries and job opportunities provide stability and a foundation for growth.
Population trends: Melbourne is set to overtake Sydney as Australia’s most populous city, pushing up housing demand.
Major infrastructure: Ongoing transport and housing projects reinforce Melbourne’s reputation as a highly liveable city.

These factors are driving renewed interest and setting the stage for potential growth over the next couple of years.

Confidence is Building

We are seeing more buyers in the market, with auction clearance rates climbing steadily. However, not all suburbs or property types will experience the same growth. It’s not just about buying—it’s about buying smart.

The broader market under $1 million is benefiting first-home buyers: With government incentives and improved affordability, more buyers are entering this price range.
Sub-$600k properties are in high demand: This segment is attracting the most competition.
Banks are already reducing fixed-rate loans: Lower borrowing costs could further increase buyer activity and competition in the coming months.

High buyer competition

for sub $600k properties

Undervalued Suburbs and Equity Potential

Right now, Melbourne offers solid opportunities for those who can identify “inbuilt equity” in undervalued suburbs. That said, success comes down to local knowledge—this market isn’t one-size-fits-all. Some areas are better positioned for growth than others, and it pays to know the difference.

Tight Rental Conditions

The rental market is under serious pressure. Vacancy rates are at historic lows, and rents have risen sharply. For investors, this is creating competition for properties offering strong rental returns, but it also means renters are struggling to find options.

Government Policies Targeting Supply

The Victorian government is introducing measures to stimulate housing supply, which could ease market pressures over time:

Stamp duty cuts: A one-year waiver for off-the-plan apartments, units, and townhouses, no matter the price.
Planning changes: New activity centres aimed at fast-tracking approvals for multi-storey developments.

These changes are worth watching as they could influence supply and affordability down the track.

Timing Your Purchase

The waiting game is risky. Hoping for interest rates to drop might leave you scrambling for a limited pool of quality properties when the competition heats up. With banks already reducing fixed-rate loans, buyers may find borrowing conditions improving sooner than expected. The early signs of recovery are already here, and acting now could help you secure better opportunities.

The Melbourne market is showing real signs of life, supported by strong economic and demographic fundamentals. But it’s not enough to know the big picture—you need the detail. Whether you’re buying your first home, upgrading, or investing, now is the time to plan your move.

Stamp Duty Savings

one-year waiver for off-the-plan

As always, the right advice and a clear strategy will set you apart from the rest. Trust MRE to guide you throughout the year.

If you’re looking to buy, sell, or invest in the Melbourne property market, our team at MRE is ready to help. Get in touch with us for expert guidance and tailored strategies to make the most of your opportunities.