Melbourne Tipped to Lead the 2026 Property Boom
Melbourne's property market is gaining momentum, and experts predict it will outpace other capital cities by 2026. With interest rates stabilizing and population growth rebounding, Melbourne could be the epicenter of the next real estate surge.
Key Takeaways
- Melbourne is forecast to lead Australia's property boom by 2026.
- Rate cuts and population growth are driving strong price recovery.
- Key suburbs are already seeing sharp price increases.
- Major banks and consultancies like KPMG support the bullish outlook.
- Buyers may benefit from entering the market before prices peak.
Why Melbourne Is Set to Lead the 2026 Property Boom
Several factors are aligning to make Melbourne the frontrunner in the upcoming property cycle. KPMG’s 2023 report projects Melbourne house prices will rise more than any other capital city by mid-2026. This bullish forecast stems from a combination of affordability, infrastructure investment, and strong migration trends.
Post-pandemic population recovery is especially strong in Melbourne, with overseas migration and interstate arrivals pushing up demand. Combined with a slowdown in new housing supply, this imbalance is setting the stage for rapid price growth.
“Melbourne has the fundamentals in place for a major turnaround—strong demand, limited supply, and improving affordability,” says KPMG’s chief economist.
According to the Australian Bureau of Statistics, Victoria recorded the highest population growth in the country, driven by international migration, further bolstering Melbourne's housing demand.
Melbourne House Prices: The Suburbs Booming After Rate Cuts
Recent interest rate cuts have already sparked renewed activity in Melbourne’s property market. Several suburbs are emerging as early winners, showing robust price growth and strong buyer interest.
Sunshine: Gentrifying rapidly with new transport links and amenity upgrades.
Coburg: Popular among first-home buyers and investors due to proximity to the CBD.
Frankston: A coastal hotspot benefiting from lifestyle appeal and infrastructure boosts.
Werribee: Affordable family homes driving demand in the west.
Key Insight: Suburbs within 15–25 km of the CBD are seeing the sharpest price rebounds, driven by affordability and improved transport access.
What the Banks and Analysts Are Saying
A major bank recently tipped a “stunning turnaround” for Melbourne’s property market, citing improving consumer sentiment and rising clearance rates. The Reserve Bank’s rate cuts have lowered borrowing costs, fueling renewed demand.
KPMG’s forecast aligns with this optimism. Their model suggests Melbourne house prices could rise by over 20% through 2026, outpacing Sydney and Brisbane. The city’s diverse economy and infrastructure pipeline—from suburban rail loops to hospital expansions—support this growth.
- KPMG predicts Melbourne to be the top-performing city by 2026.
- Major banks echo this sentiment, citing economic strength and buyer demand.
- CoreLogic data shows early signs of recovery across multiple suburbs.
CoreLogic’s market insights also point to increasing auction clearance rates and rising property values in inner and middle-ring suburbs.
Should You Buy Property in Melbourne?
If you're wondering, should you buy property in Melbourne?, the data suggests now is a compelling time to consider it. With prices still below peak levels and future growth projections strong, early movers could benefit the most.
Melbourne offers a mix of affordability, lifestyle, and long-term capital growth. The current market conditions favor buyers who act before the next upswing fully materializes.
Key Insight: Buying in 2024–2025 may allow investors and homebuyers to lock in value before the 2026 boom peaks.
A Guide to the Melbourne Property Market
Understanding the local dynamics is essential for making smart property decisions. Here’s what to watch:
Supply constraints: Low construction volumes are tightening availability.
Migration trends: Net population growth is highest in Melbourne among capital cities.
Infrastructure: Projects like the Metro Tunnel and Suburban Rail Loop increase suburb connectivity.
Rental yields: Strong demand and low vacancy rates are lifting investor returns.
Whether you're an investor or first-time buyer, Melbourne's housing market offers strategic opportunities—especially in emerging suburbs and growth corridors.
“This is a market on the move. The fundamentals are too strong to ignore.” — Property market analyst, 2024
By understanding the drivers behind Melbourne’s projected boom, buyers can prepare for what may be the country's most exciting property cycle in years.