No, Melbourne is experiencing a two-speed market where apartments and houses are diverging. While some apartment prices and inner-suburb villa units have increased recently, inner-city high-density apartments are facing softer conditions, whereas houses in outer suburbs are outperforming the city median.
Buyers are currently prioritising assets based on affordability and specific property types. While outer eastern house prices continue to climb, the performance of apartments varies significantly depending on density and location.
The two-speed market dynamic
Different segments are performing at different levels. Properties in outer suburbs are outperforming the city median, with eastern regions such as Whitehorse East recording 8.6% annual growth (Cotality, January 2026) and Knox recording 7.6% growth (Cotality, January 2026).
Apartment and villa performance
Price trends for apartments are not uniform. While inner-city high-density apartments have seen softer conditions, apartment prices across Melbourne have generally been increasing more recently, with villa units in inner suburbs also seeing gains.
The impact of affordability
The affordable segment under $800,000, which includes many apartments and entry-level houses, shows mixed results. Some areas have seen price declines due to oversupply and reduced investor activity, while others have benefited from infrastructure and first-home buyer incentives.
The interest rate uncertainty
RBA rate hikes in February and March 2026 have introduced new uncertainty into the market. This volatility affects borrowing capacity and buyer confidence across both house and apartment segments.
| Region (Eastern Suburbs) | Median Price | Annual Growth (Jan 2026) |
|---|---|---|
| Whitehorse East | $1,239,067 | +8.6% (Cotality) |
| Knox | $965,300 | +7.6% (Cotality) |
Frequently asked questions
Is it a better time to sell a house or an apartment?
Houses in outer suburbs are currently outperforming the city median as investors and first-home buyers enter the market. Apartment performance is split; while villa units are seeing gains, inner-city high-density options are experiencing softer conditions. The best timing depends on the specific property type and location.
How have 2026 interest rate hikes affected Melbourne property?
Rate hikes in February and March 2026 have introduced new uncertainty into the market. This follows a strong recovery in 2025, where Melbourne median house prices increased approximately 11–14%. These recent hikes may impact the momentum of the affordability-driven recovery seen in outer suburbs.
Which Melbourne regions are seeing the highest growth in 2026?
As of January 2026, Frankston led growth at 14.3% with a median of $856,746 (Cotality). Other high-growth areas include Kingston at 8.8%, Whitehorse East at 8.6%, and Dandenong at 8.5% (Cotality). Heidelberg also reported year-on-year growth of 25.9% (Domain).
Are apartments still a viable investment in the eastern suburbs?
Results are mixed for the affordable segment under $800,000. Some apartments have seen price declines due to oversupply and lower investor activity. However, other areas have benefited from first-home buyer incentives, and villa units in inner suburbs have shown recent price increases.
Questions to ask your agent
- How does the current demand for villa units in this suburb compare to high-density apartment complexes?
- What percentage of recent buyers in this price bracket are first-home buyers utilizing government incentives?
- How have the February and March rate hikes specifically altered the buyer profile at recent open for inspections?
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.