Melbourne’s property market is tipped for an “interesting” year ahead after new home value data revealed prices have stalled.
Melbourne’s property market recovery could be on the ropes just months after it got started, with new stats revealing values went backwards in January despite expectations of growth.
PropTrack’s latest Home Price Index shows the city’s typical house lost ground in January, with a 0.1 per cent decline that knocked just over a thousand dollars off the figure and brought it to $1.007m.
And while the Victorian capital is still up for the year, having risen $47,000 (3.8 per cent) since January, 2025, its falling behind other major capitals including Sydney, Brisbane, Adelaide and Perth, where home prices surged six figures in the same timeline.
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The city’s unit values remained flat for the month at $624,000, and are up $17,900 (2.8 per cent) in the past year — again, being significantly outpaced around the nation with Brisbane and Perth figures also jumping $100,000-plus for units, townhouses and apartments.
PropTrack economics executive manager Angus Moore said Melbourne had become “an interesting one”.
PropTrack economist Angus Moore says Melbourne’s property market could be in for an interesting year ahead.
“In 2025 Melbourne started to look a bit more solid, like the long awaited recovery was finally arriving, but spring did look a bit softer and Melbourne’s seen prices decline modestly through the last three months,” Mr Moore said.
“Part of the story there, and the same is true for Sydney, is that there has been quite a lot of choice for buyers on market.
“And while that doesn’t have a huge impact on prices, relative to something like interest rates, it probably at the margin, has an effect and has helped keep price growth in Melbourne a little bit slower than what we’ve seen in some other parts of the country, where choice is very limited and prices have been growing very quickly.”
While he noted it was hard to read momentum in January and December, the economist said the prospect of a rate hike as soon as this week was a “headwind” for home prices – but that Melbourne’s relative affordability to other capitals meant it was more likely to see growth continue in 2026.
Cohen Handler Victoria managing director Nicole Jacobs says underquoting regulation and solutions will always struggle to deal with emotion-driven buyers pushing prices up.
“We are expecting we’ll see home prices in Melbourne grow, but it will potentially slow that pace of growth,” Mr Moore said.
As a result, he said there were no expectations of any improvement in housing affordability in the next 12 months.
Prominent buyer’s agent Nicole Jacobs said while January could be hard to gauge, it had been easier to buy in recent months and she was expecting the year ahead would be flat and even slightly sluggish for some parts of the property market.
Ms Jacobs said owners of homes that were ready to move into and well located would likely continue to get good sales, especially below the $1m price point.
Homebuyers hoping to get good value for money would be best to seek our properties just over the seven-figure range if they could afford to do so, according to the Cohen Handler buyer’s agent.
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