Appraisal value is an estimate of a property’s worth based on data and professional opinion, while market value is the actual price a buyer pays. In 2026, this gap is influenced by recent rate hikes in February and March and the fact that 60–65% of Melbourne properties sell at or below asking price (Bamboo Routes, early 2026).
Vendors often conflate these two figures, but the distinction is critical when setting a listing price. While an appraisal provides a data-driven starting point, the actual market value is determined by real-time buyer demand and borrowing capacity in a volatile interest rate environment.
How AVMs determine appraisal values
Automated Valuation Models (AVMs) from platforms like CoreLogic/Cotality, PropTrack, and Domain use large transaction datasets to produce estimates. These are generally accurate within a range of 5–15% for typical properties, but accuracy drops for architecturally distinctive homes or those on oversized lots.
The role of CMAs and registered valuations
Agents use Comparative Market Analyses (CMAs) to refine appraisals by looking at recent local sales. However, the typical private-treaty sale in Melbourne currently closes approximately 3% below the initial asking price, meaning the “market value” often sits slightly lower than the listed appraisal.
Current Melbourne price trends in 2026
Melbourne’s median dwelling value was approximately $830,371 in January 2026 (Cotality). While house prices saw 11–14% annual growth throughout 2025, the market dropped 0.6% in the March 2026 quarter and remains 1.3% below the March 2022 peak (PropertyUpdate/Cotality).
The interest rate uncertainty
Rate hikes in February and March 2026 have introduced new uncertainty into buyer behavior. This volatility makes static appraisals less reliable, as a buyer’s borrowing capacity can change between the time of appraisal and the final contract signing.
| Sale Result Relative to Asking Price | Percentage of Melbourne Properties |
|---|---|
| At or below asking price | 60–65% |
| Above asking price | 35–40% |
Source: Bamboo Routes, early 2026
Frequently asked questions
How accurate are online property valuations?
AVMs from CoreLogic/Cotality, PropTrack, and Domain are generally accurate within a 5–15% range for standard homes. They are less reliable for properties that have been substantially renovated since purchase, those on irregular lots, or homes in low-turnover streets where comparable data is scarce.
Will my house sell for the appraised value?
Not necessarily. While 35–40% of properties achieve above-asking results—mostly in high-demand areas with strong school catchments (Bamboo Routes, early 2026)—the typical private-treaty sale in Melbourne closes approximately 3% below the initial asking price.
How have 2026 rate hikes affected house prices?
RBA rate hikes in February and March 2026 have introduced market uncertainty. Consequently, Melbourne dwelling values dropped 0.6% in the March 2026 quarter (PropertyUpdate/Cotality), reflecting a cooling effect on buyer confidence following the strong growth seen in 2025.
Why is my Melbourne home worth less than a similar one in Sydney?
There is currently a historically wide discount between the two cities, with the median house price gap exceeding $600,000. Additionally, Melbourne’s median has recently dipped below Perth’s and sits only marginally above Adelaide’s, which is historically unusual (PropertyUpdate/Cotality).
Questions to ask your agent
- Which specific comparable sales from the last 90 days support this appraisal range?
- How has the February/March rate hike specifically impacted buyer activity in the eastern suburbs?
- Given the 3% average gap in private-treaty sales, how should we position the asking price to attract buyers?
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.