Key takeaways
- As at February 2025, Melbourne dwelling values were down 6.9% from the March 2022 peak — a fall of roughly A$57,500 on the median.
- Melbourne was the weakest capital: -3.3% annually, against Perth +17.1%, Adelaide +12.7% and Brisbane +10.4%.
- The decline continued. Melbourne house values were down a further 1.2% year-on-year to June 2026, with the median near A$948,000.
- This article framed the fall as an opportunity to buy before a rebound. Eighteen months later the rebound has still not arrived.
- A falling market is not a reason to avoid Melbourne — it means more listings and negotiating room — but it is a reason to buy on income rather than on timing.
Melbourne home values are down 6.9% from their March 2022 peak, representing a median price drop of approximately $57,500. The question is:
Will you seize this opportunity or regret missing out?
Change in dwelling values over key time periods:
Melbourne Property Prices: The Decline You Should Be Paying Attention To
Melbourne has recorded the most significant decline among Australian capital cities in recent months.
Change in Dwelling Values ( CoreLogic Home Value Index )
Released February 3rd 2025
| City | Month | Quarter | Annual | Total Return | Median Value |
|---|---|---|---|---|---|
| Sydney | -0.4% | -1.4% | 1.7% | 4.8% | $1,193,228 |
| Melbourne | -0.6% | -2.0% | -3.3% | 0.4% | $772,317 |
| Brisbane | 0.3% | 1.2% | 10.4% | 14.7% | $893,592 |
| Adelaide | 0.7% | 1.8% | 12.7% | 16.9% | $819,363 |
| Perth | 0.4% | 1.0% | 17.1% | 22.3% | $809,870 |
| Hobart | 0.0% | -0.8% | -0.4% | 3.9% | $658,180 |
| Darwin | 0.6% | 1.7% | 0.9% | 7.5% | $502,632 |
| Canberra | -0.5% | -0.5% | -0.5% | 3.8% | $850,534 |
| National | 0.0% | -0.3% | 4.3% | 8.3% | $814,293 |
- Property values dropped 0.6% in January alone, compared to 0.4% in Sydney and 0.5% in Canberra.
- Over the past 12 months, Melbourne property values have fallen by 3.3%.
- Compared to its peak in March 2022, Melbourne prices are now 6.9% lower.
| If you’re a Singaporean investor, compare this to Singapore’s property market, where prices have remained sky-high, and the Additional Buyer’s Stamp Duty (ABSD) is eating into returns. This could be your golden ticket to an asset without the hefty tax burden. |
Rents Are Still Rising — A Sign of Strong Demand
While property values are adjusting, rents have continued to climb:
- Rents increased by 0.4% in January across Australia, with Melbourne seeing a modest rise.
- Over the past three months, regional rental growth (+1.6%) has outpaced capital city rental growth (+0.3%).
- Despite the slight softening in demand, rental yields remain attractive at 3.8% in Melbourne.
| If you’re buying for rental income, Melbourne offers a compelling balance of affordability and consistent tenant demand. With migration picking up, expect demand for rentals to surge further! |
Market Trends: Is Melbourne Becoming a Buyer’s Market?
Here’s what the data tells us:
- Listings in Melbourne have increased by 7.7% over the past year, giving buyers more options.
- Capital city listings are tracking higher than a year ago, meaning more sellers are adjusting expectations.
- Stock levels are higher than in early 2024, a sign that conditions favor buyers rather than sellers.
| This is the classic formula for a buyer’s market: lower prices, more listings, and motivated sellers. Investors who move now can negotiate better deals before competition picks up. |
Interest rate cuts in 2025 could stabilize property prices and drive demand up again:
- A cash rate cut as early as February could improve borrowing capacity.
- Once rates drop, demand will increase, pushing prices back up.
- The market downturn is shallow and temporary, meaning prices could rebound sooner than expected.
| If you wait until rates drop, you’ll be buying at higher prices when demand surges. Act now while others are still sitting on the fence! |
Perth vs. Melbourne: Which Is Right for You?
While Melbourne offers incredible buying opportunities, Perth is another city seeing strong investor interest:
- Perth home values have surged 17.1% year-on-year, making it the fastest-growing market in Australia.
- Although Perth’s median home price is slightly higher at $809,870 compared to Melbourne’s $772,317, the key difference lies in stronger rental yields.
- Rental yields in Perth are significantly higher at 7.4%, making it a landlord-friendly market with higher rental income potential.
If you’re after rapid capital growth and strong rental returns, Perth is worth considering. However, Melbourne offers long-term stability and international demand, making it a safer bet for conservative investors.
The Time to Act Is Now
If you’re after rapid capital growth and strong rental returns, Perth is worth considering. However, Melbourne offers long-term stability and international demand, making it a safer bet for conservative investors. |
Melbourne property values have dipped, but history tells us this won’t last forever. The moment interest rates start dropping, demand will rebound, and prices will follow. Investors who buy now will benefit from:
- Lower entry prices before the market turns - Better negotiating power with sellers who are more willing to deal - Strong rental demand and rising rental income - A proven long-term market with stable growth potential
| But here’s the catch: If you wait too long, you risk missing out on Melbourne’s bottom prices. The choice is yours — take action now or watch from the sidelines as others reap the rewards. |
Don’t Let This Opportunity Slip Away — Contact Me Today!
If you’re serious about securing a high-potential investment in Melbourne or Perth, connect with us now! Let’s discuss your investment goals and find the right property before prices climb again.
Josh Tay