As of July 2025, Melbourne's median dwelling value was recorded at $824,000, making it the most affordable amongst the five major capitals, trailing the collective median of $929,000 by 11.3%. A historical analysis reveals that Melbourne’s housing affordability relative to other cities is nearing its peak over the last two decades.
This price point dynamic is capturing attention. KPMG anticipates Melbourne will lead Australia's housing markets in 2026 owing to increasing interest from bargain-seeking buyers. Predictions indicate a 6.6% hike in Melbourne home prices next year, surpassing the average national increase of 4.5%.
KPMG’s chief economist, Brendan Rynne, remarked on robust expectations, particularly within the unit market due to its enticing affordability. This sentiment is shared by buyer advocate Arin Russell, who notes a surge of Western Australian investors eyeing Melbourne to leverage a potential upswing before a full market recovery surfaces.
Despite Melbourne's economic challenges and less favourable tax conditions for investors, the city's allure lies in its affordability and projected significant population growth. The Victorian state government forecasts that Melbourne's population will reach nine million by 2050, fueling potential property demand.
