Understanding prevailing interest rates is crucial when selling property, as they directly influence buyer borrowing capacity and therefore demand. As of December 2025, interest rates aren’t directly part of the selling process, but they significantly shape the market conditions sellers encounter.
In 2026, Melbourne’s property market is expected to see moderate growth of 3-6%, influenced by the Reserve Bank of Australia’s (RBA) cash rate decisions. Currently in Melbourne, variable home loan rates are averaging around 6.5% – 7.5%, however, these figures fluctuate. A stable or decreasing interest rate environment generally encourages buyer confidence, potentially leading to increased competition and stronger auction results, particularly in the Eastern Suburbs where family homes near schools in areas like Balwyn and Doncaster are highly sought after. Conversely, rising rates can cool demand. Sellers should be aware that buyers will be factoring mortgage repayments into their purchasing decisions. Fletchers’ agents closely monitor these economic indicators and provide clients with detailed market updates throughout their campaign. The typical sales process in Melbourne, encompassing a 4-6 week campaign, 2-4 week inspection period, and 30-60 day settlement, allows time for these market shifts to be considered. Marketing costs, typically between $3,000 and $8,000, are also factored into the overall financial considerations.
Interest rates are a key economic driver impacting Melbourne’s property market, influencing buyer behaviour and ultimately, the success of a property sale in 2026.