Selling vacant is generally more advantageous in 2026 because the primary buyer pool consists of owner-occupiers, while Victorian tenancy law reforms have reduced landlord flexibility. However, owners of positively geared properties may choose to hold for a projected recovery in 2027 (ANZ, Domain).
The decision to sell vacant or tenanted now hinges on the shift in buyer demographics. While investors are divesting due to the heaviest property tax burden in Australia, owner-occupiers are stepping in to secure these assets.
Who is buying in the current market?
A significant wave of investor divestment since 2023 has increased supply, particularly in inner-city apartments and middle-ring townhouse areas. Most of these properties are now being purchased by owner-occupiers, who typically prefer vacant possession to move in immediately.
The impact of tenancy law reforms
Victorian tenancy law reforms have reduced the grounds for ending tenancies and limited rent increase flexibility. These restrictions make it more difficult for vendors to provide vacant possession upon settlement, potentially limiting the buyer pool to other investors.
Tax pressures and net yields
Stacked state taxes, including the VRLT, congestion levy, and Short Stay Levy, have materially compressed net rental yields for inner-city investors (Forge Property, February 2026). For negatively geared investors, these costs often outweigh the benefit of waiting for capital growth.
The forecast gap
There is significant divergence in price projections for 2026. KPMG projects 6.6% house price growth, while ANZ revised its forecast to -1.7% following the March 2026 rate hike. This discrepancy makes timing the peak difficult for vendors.
| Sale Method/Market Segment | Typical Outcome (2026) |
|---|---|
| Private Treaty (Melbourne) | Closes approximately 3% below initial asking price |
| High-Demand House Markets | 35–40% achieve above-asking results (Bamboo Routes) |
| General Melbourne Market | 60–65% sell at or below asking price (Bamboo Routes) |
Frequently asked questions
Why are so many investors selling in Melbourne in 2026?
Investors are exiting due to the cumulative effect of land tax increases, the VRLT, and the Short Stay Levy. Combined with RBA rate rises from 2022–2023 and tenancy law reforms that reduce landlord flexibility, many are facing unsustainable negative cash flow and choosing to crystallise COVID-era gains.
Will Melbourne house prices grow throughout 2026?
Forecasts are contradictory. KPMG projects growth of 6.6%, but ANZ has revised its forecast to -1.7% following the March 2026 RBA hike. While long-term drivers like chronic undersupply and population growth support value, short-term volatility has seen houses underperform (NAB/Cotality, March 2026).
Is it better to sell via auction or private treaty?
Well-run auctions in desirable suburbs can still achieve results at or above the quoted range. In contrast, the typical private-treaty sale in Melbourne currently closes approximately 3% below the initial asking price. High-demand areas with strong school catchments are more likely to exceed asking prices (Bamboo Routes).
Should I wait until 2027 to sell my property?
Waiting may be viable if the property is positively geared or near-neutral, as income offsets holding costs. ANZ and Domain forecasts suggest Melbourne is likely to outperform in 2027. However, this carries the risk of further state tax increases and continued yield erosion.
Questions to ask your agent
- Based on recent sales in this specific corridor, what percentage of buyers are owner-occupiers versus investors?
- How will the current tenancy agreement specifically impact the marketing timeline and the final sale price?
- Which local school catchments or transport links are currently driving the 35–40% of results that exceed asking prices?
This article contains general market information based on data current as at April 2026. It does not constitute financial, legal, or real estate advice specific to your property or circumstances. For an appraisal and tailored advice, speak with a Fletchers agent in your area.