Buyer confidence is surging across Melbourne, with new data and on-the-ground insight revealing competition is intensifying as demand returns faster than listings. Picture: Getty Images
Melbourne buyers who waited out years of uncertainty are being forced back into the market as competition surges and confidence snaps back faster than expected.
After sitting on the sidelines through interest rate shocks, land tax debate and gloomy sentiment, buyers across the city are discovering the window they waited for is closing, and the market has shifted beneath them.
New data from property services firm Oliver Hume shows Melbourne is now best positioned to lead capital city land markets higher in 2026, after several years of flat prices left the city well placed for a recovery.
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M R Advocacy director Madeleine Roberts said competition was building again in pockets that had been quiet for years.
“Buyers are definitely back,” Ms Roberts said.
“On the ground, it’s very much guns blazing.”
Oliver Hume data shows the gross median lot price in Melbourne rose 2.1 per cent to $407,000 in the September quarter, up from $398,500 in the June quarter.
M R Advocacy director Madeleine Roberts says buyers are returning “guns blazing” after years of caution, with competition building across multiple Melbourne suburbs.
Melbourne’s housing market is showing early signs of a turnaround, as buyers re-enter after several subdued years marked by flat prices and uncertainty. Picture: Jake Nowakowski
Headline prices were flat at the same level as September 2024.
The median price is now well behind South East Queensland at $483,600, with Adelaide at $349,900 closing the gap, according to Oliver Hume.
Ms Roberts said a shift in sentiment had played as big a role as rate relief.
“Twelve months ago, interstate investors and even local investors didn’t want to touch Victoria,” she said.
“There was real wariness around land tax changes and rental reforms.
Frankston is emerging as an early mover in Melbourne’s recovery, with buyers facing rising competition after prices lifted sharply over the past year.
Suburbs across Melbourne’s east are tightening, with buyer demand picking up well before broader price growth shows in the data. Picture: Wayne Taylor
“Over the past six months, buyers have realised those taxes aren’t anywhere near as scary as first feared. Combined with interest rate cuts, that’s brought first-home buyers back, allowed people to upgrade, and drawn interstate investors back into Victoria.”
The M R Advocacy director said buyers who delayed decisions between 2022 and 2024 were now facing a market moving faster than their savings.
“I’m not seeing panic, but I am seeing action,” Ms Roberts said.
“The biggest risk is the market outpacing your ability to save.”
She said early momentum was already evident in the traditional investment hotspots across Melbourne’s southeast and north, with competition also picking up in parts of the east.
“In Frankston, for example, properties we were buying last year for around $600,000 are now closer to $800,000,” Ms Roberts said. “That’s a huge jump in just 12 months.”
Selling agents said the shift was also showing up in auction crowds and bidder depth.
Buxton Ashburton director and auctioneer Tai Menahem says competition at auctions has strengthened sharply as upgraders re-enter the market.
Buxton Ashburton director and auctioneer Tai Menahem said spring had been markedly stronger than the past few years.
“This has been far more competitive – by a mile – than anything we’ve seen over the past two to three years,” Mr Menahem said.
“Buyers are finally seeing light at the end of the tunnel after a couple of interest rate cuts.
“There’s a growing belief the worst is behind us and that now is the time to buy.”
Mr Menahem said upgraders were driving much of the urgency, after delaying moves through the tougher cycle.
“A lot of these buyers held back for two or three years and now they simply have to upgrade,” he said.
“They’re fighting tooth and nail to secure a property.”
Oliver Hume chief executive Julian Coppini says Melbourne is well positioned for its next growth phase after years of underperformance relative to other capitals.
Oliver Hume chief executive Michael Coppini said the city’s relative affordability was helping to pull buyers back as other markets cooled from earlier surges.
“We are particularly optimistic about Melbourne, where we expect to see sustained improvement in both prices and transaction volumes,” Mr Coppini said.
“Volumes have already begun to rise, and Melbourne now offers the best relative affordability of eastern seaboard capital cities.”
While interest rates remain a risk, analysts say the combination of returning confidence, population growth and ongoing supply constraints means conditions can tighten quickly once buyers re-enter at the same time.
For those still waiting on the sidelines, the warning signs are already there.
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