Melbourne Tipped to Lead 2026 Property Boom: What Buyers and Investors Need to Know
Melbourne is emerging as the front-runner in Australia’s next property surge, with 2026 shaping up to be a breakout year. According to KPMG, the city is poised for significant price gains, driven by strong population growth, infrastructure investment, and easing interest rates.
Key Takeaways
- Melbourne house prices are forecast to surge in 2025–26, outpacing other major cities
- KPMG reports point to rate cuts, supply shortages, and migration as key propellants
- Strategic buyers are already positioning for the 2026 property boom
- Inner and middle-ring suburbs are tipped for the highest growth
- Apartments and houses in Melbourne both show strong potential
Why Melbourne Is Set to Lead the 2026 Property Boom
KPMG’s latest housing market outlook predicts Melbourne will outperform all other Australian capitals by 2026. The city's median house prices are expected to climb sharply as interest rates fall and buyer confidence returns.
Population growth is a major factor. Melbourne is projected to add over 1 million residents by 2030, increasing demand for housing across all price points. At the same time, construction lags behind demand, creating a supply crunch that will likely push prices higher.
This aligns with recent forecasts by the Australian Housing and Urban Research Institute highlighting the impact of rapid population increases on urban housing shortages.
Key Insight: Melbourne’s housing shortfall is expected to grow just as demand peaks, creating ideal conditions for a market surge.
Melbourne Houses and Apartments to Shine in 2026: KPMG
Both houses and apartments in Melbourne are forecast to appreciate, but for different reasons. Detached homes in growth corridors like Werribee, Cranbourne, and Mickleham are attracting young families and first-home buyers. Meanwhile, inner-city apartments are rebounding thanks to overseas students and returning CBD workers.
“Melbourne’s combination of population growth, infrastructure spending, and limited housing supply makes it the standout performer,” said KPMG in its report.
Investors are particularly eyeing suburbs with upcoming transport upgrades, such as those along the Suburban Rail Loop. These areas are expected to see strong capital gains and rental demand through 2026 and beyond.
The Victorian Government has confirmed major investments in transport infrastructure, which are expected to reshape real estate values across the city.
The Suburbs Booming After Rate Cuts
Interest rate reductions, expected throughout late 2024 and into 2025, are already stimulating buyer interest. As borrowing becomes more affordable, demand is rising in several key Melbourne suburbs:
- Preston and Reservoir: Gentrifying inner-north pockets with strong rental yields
- Sunshine and Footscray: Western suburbs benefiting from infrastructure and affordability
- Box Hill and Glen Waverley: Eastern hubs attracting international buyers
These areas are forecast to outperform the broader market, with house prices tipped to hit record highs in 2025–26.
Getting Ahead of Melbourne’s 2026 Property Boom
Buyers and investors looking to capitalise on Melbourne’s next property upswing should act early. With upward trends already forming, 2024 and 2025 may offer the best entry points. Key strategies include:
- Targeting suburbs with infrastructure projects or rezoning potential
- Considering both houses and high-quality apartments
- Monitoring rental yields in student and migrant-heavy areas
- Working with local agents to identify undervalued pockets
Pro Tip: Look beyond headline prices—focus on long-term fundamentals like transport, schools, and demographic trends.
Property Prices Tipped to Hit Record Highs in 2025–26
KPMG’s modelling suggests Melbourne house prices could rise more than 20% by mid-2026. Apartments are also set to recover, particularly in the inner city. These gains would place Melbourne ahead of Sydney, Brisbane, and Perth in terms of percentage growth.
With a perfect storm of demand drivers and limited new supply, Melbourne is not just recovering—it’s leading. For those planning their next move, the window to get ahead of the 2026 property boom is already opening.