Melbourne Tipped to Lead 2026 Property Boom
Melbourne is poised for a significant property upswing, with analysts forecasting a surge in house and apartment prices by 2026. As interest rates stabilise and demand rebounds, suburbs across the city are attracting buyers and investors eager to capitalise on the expected growth.
Key Takeaways
- Melbourne is forecast to lead Australia’s 2026 property boom.
- Suburbs in Melbourne are already seeing upward trends after recent rate cuts.
- KPMG predicts strong performance for both houses and apartments.
- Property prices could hit record highs by 2025–26.
- Investors are turning attention to Melbourne’s growth corridors.
Why Melbourne Is Set to Lead the 2026 Property Boom
According to KPMG, Melbourne is uniquely positioned to outperform other Australian cities in the coming years. Factors such as population growth, infrastructure projects, and housing supply constraints are driving confidence in the city's real estate outlook.
The report notes that Melbourne's affordability—compared to Sydney—will attract both first-home buyers and interstate migrants. Additionally, new transport hubs and urban renewal zones are making outer suburbs more accessible and desirable.
ABS data supports this, showing Victoria’s population growth has consistently outpaced other states, reinforcing long-term housing demand.
“Melbourne’s fundamentals remain strong, and its property market is primed for a robust recovery,” said KPMG’s chief economist.
Melbourne House Prices: The Suburbs Booming After Rate Cuts
Recent interest rate cuts have had a noticeable impact on Melbourne’s property market. Suburbs once considered out of reach are seeing renewed buyer activity, and median prices are on the rise.
Notable areas showing early signs of growth include:
- Werribee and Tarneit in the west
- Cranbourne and Pakenham in the southeast
- Preston and Reservoir in the north
Key Insight: These suburbs offer a combination of affordability, connectivity, and development potential—making them prime candidates for capital growth by 2026.
Melbourne Houses and Apartments to Shine in 2026: KPMG
KPMG’s forecast highlights both detached homes and high-density apartments as strong performers in Melbourne’s future market. While houses in family-friendly suburbs remain popular, inner-city apartments are regaining appeal after pandemic-era declines.
Apartments in areas like Southbank, Docklands, and Carlton are attracting investors looking for rental yield and long-term appreciation.
- House prices are projected to grow steadily due to limited new supply.
- Apartments are becoming more viable as rental demand increases.
- Mixed-use developments are drawing interest across the city.
Increased urban density and proximity to job centers are revitalising apartment living, particularly in Melbourne’s CBD and near universities.
Property Prices Tipped to Hit Record Highs in 2025–26
Australia’s broader property market is expected to recover, but Melbourne stands out. By late 2025 into 2026, analysts predict that property prices could surpass previous records.
Driving this trend:
- Continued population growth in Victoria
- Delays in housing construction
- Government incentives for homebuyers
With demand outpacing supply, Melbourne's market dynamics suggest strong prospects for capital gains.
“Buyers who enter the market in 2024 and 2025 may be well-positioned to reap the rewards of Melbourne’s 2026 boom,” said a property strategist from Domain.
What Investors Should Watch
To capitalise on Melbourne’s forecasted growth, investors should monitor:
- Infrastructure upgrades and new transport links
- Zoning changes and high-growth planning areas
- Rental vacancy rates and tenant demand
Staying informed about these trends can help identify the next wave of booming suburbs.
Key Insight: Strategic purchases in 2024–25 could yield high returns as Melbourne’s property market peaks in 2026.