Melbourne buyers have the capacity to move, but uncertainty around rates, timing and the cost of moving is keeping many on the sidelines. Picture: Tony Gough
Melbourne homebuyers can afford to move, but many are choosing to wait, as uncertainty around rates and timing keeps them on the sidelines.
New PropTrack forecasts show Melbourne home prices are expected to rise between 5 per cent and 7 per cent in 2026, a slower pace than some other capitals but slightly stronger than growth this year, pointing to a market that is stabilising rather than stalling.
PropTrack senior economist Anne Flaherty said Melbourne was entering 2026 from a position of relative strength after lagging other capitals through the recent cycle.
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“Melbourne is one of the few capital cities where forecast growth next year is actually a little higher than what we saw this year,” Ms Flaherty said.
“Melbourne has become relatively more affordable compared to many other capital cities, and when you combine that with strong population growth and the fact that new housing supply is not expected to keep pace with demand, those factors should continue to support price growth.”
From first-home buyers to upgraders, many Melburnians are choosing to wait rather than rush decisions.
PropTrack senior economist Anne Flaherty says Melbourne’s housing market is stabilising, with population growth and limited supply continuing to support prices.
Ms Flaherty said the rising cost of moving had become one of the most powerful forces reshaping buyer behaviour across Melbourne.
“Victoria’s stamp duty settings are a major disincentive to selling one home and buying another,” she said.
“If you look at a family that might otherwise move several times over a 20-year period, the amount of money lost purely to stamp duty is enormous.
“That has fundamentally changed behaviour and reduced turnover.”
Despite those fundamentals, Melbourne’s spring selling season failed to deliver the surge in listings many buyers had expected, contributing to a more cautious mood across the market.
Whitefox Stonnington director Michael Fava says buyer interest remains strong, but many households are hesitating as they wait for greater certainty.
Melbourne’s housing market is active, but buyers are taking longer to make decisions as uncertainty lingers. Picture: Wayne Taylor
Whitefox Stonnington director Michael Fava said buyer interest remained strong, but hesitation was widespread as households waited for greater certainty.
“We didn’t see the number of properties come to market that people thought would,” Mr Fava said.
“That’s left some buyers disappointed, while others are realising they may need to compromise rather than hold out for a perfect home.”
Mr Fava said most sellers who were moving were doing so out of necessity rather than choice, driven by growing families, school zone catchments or lifestyle changes.
“We’re seeing three main groups transacting,” he said.
“Downsizers moving into apartments for lifestyle and security reasons, entry-level buyers realising mortgage repayments may be cheaper than rent, and family buyers in the $1m to $2.5m range who are heavily focused on school zones.”
Finance With Kobe director Kobe Clarke-Jacobs says many Melbourne buyers are financially ready, but emotionally hesitant to commit.
Finance With Kobe director Kobe Clarke-Jacobs said many Melbourne buyers were financially capable of purchasing, but emotionally reluctant to commit.
“I’m seeing a lot of buyers who are financially ready, but emotionally hesitant about taking the next step,” Ms Clarke-Jacobs said.
“People are asking, ‘Yes, I can afford this, but is today really the right time?’ There’s far more second-guessing than there used to be.”
Ms Clarke-Jacobs said stamp duty weighed most heavily on first-home buyers, particularly those trying to stay under Victoria’s no-stamp-duty threshold.
“For buyers who have scraped together a five per cent deposit, spending more money and seeing none of it improve the home or reduce the loan can be hard to justify,” she said.
The Finance With Kobe director said uncertainty around interest rates was also undermining confidence, not because borrowers could not service loans, but because they feared making the wrong decision at the wrong time.
“There’s a lot of focus on rate cuts, but rate cuts often push prices higher,” Ms Clarke-Jacobs said.
“That doesn’t necessarily make housing more affordable.
“What buyers really want is certainty.”
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