Median price trends in Melbourne’s eastern suburbs showed strength in early 2026, with Whitehorse East (+8.6%) and Knox (+7.6%) among the city’s highest-growth regions (Cotality/OpenAgent, January 2026). However, broader metropolitan trends indicate a softening, with Melbourne dwelling values dropping 0.6% in the March 2026 quarter (PropertyUpdate/Cotality).
The market is navigating a transition following a strong 2025 where house prices increased approximately 11–14%. This momentum has been tempered by rate hikes in February and March 2026, which have introduced new uncertainty into buyer behavior.
Eastern suburb growth performance
Several eastern and south-eastern regions led the market into 2026. Whitehorse East recorded annual growth of 8.6% with a median of $1,239,067, while Knox saw a 7.6% increase with a median of $965,300 (Cotality/OpenAgent, January 2026).
The impact of recent rate hikes
The rate hikes implemented in February and March have stalled the early-year trajectory. While monthly growth was +0.2% in January 2026, it flattened in February and contributed to a 0.6% decline in the March 2026 quarter (Cotality Home Value Index; PropertyUpdate/Cotality).
Melbourne’s relative value position
Melbourne currently sits at a historically wide discount compared to other capitals, with the median house price gap between Melbourne and Sydney exceeding $600,000. Melbourne’s median has recently dipped below Perth’s and is only marginally above Adelaide’s.
The rate hike uncertainty
The core risk is the timing and frequency of further RBA movements. It is currently unclear if the March quarter dip (PropertyUpdate/Cotality) represents a short-term plateau or the beginning of a broader price correction.
| Region | Median Price (Jan 2026) | Annual Growth |
|---|---|---|
| Whitehorse East | $1,239,067 | +8.6% |
| Knox | $965,300 | +7.6% |
| Kingston | $1,085,527 | +8.8% |
| Frankston | $856,746 | +14.3% |
| Dandenong | $794,550 | +8.5% |
Frequently asked questions
How do Melbourne house prices compare to Sydney in 2026?
There is a historically wide discount currently available in the Melbourne market. The median house price gap between Melbourne and Sydney now exceeds $600,000, making Melbourne significantly more affordable relative to the New South Wales capital.
Did Melbourne house prices grow throughout 2025?
Yes, 2025 was a period of strong recovery for the city. Melbourne median house prices increased approximately 11–14% over the course of the year, rising from roughly $920,000 in January to between $1,020,000 and $1,050,000 by December 2025.
Which suburbs are showing signs of gentrification in 2026?
In the south-east, Frankston and Cheltenham are showing clear gentrification signals, including specialty retail and heritage renovations. Other areas include Preston, Reservoir, Footscray, and Coburg, with these regions seeing price appreciation of 8–15% over two to three years.
What is the current median dwelling value in Melbourne?
As of January 2026, Melbourne’s median dwelling value stood at approximately $830,371 (Cotality). However, values dropped 0.6% in the March 2026 quarter and remain 1.3% below the peak recorded in March 2022 (PropertyUpdate/Cotality).
Questions to ask your agent
- How are the February and March rate hikes specifically affecting buyer enquiry levels in my suburb compared to the broader eastern corridor?
- Which comparable sales from the March 2026 quarter are you using to determine the current value of my property?
- Given the wide price gap between Melbourne and Sydney, are you seeing an increase in interstate buyers targeting my property’s price bracket?
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.