Yes, growth is continuing in specific segments including Melbourne apartments, inner-suburb villa units, and houses in outer suburbs. However, these gains contrast with the broader market, where dwelling values dropped 0.6% in the March 2026 quarter (PropertyUpdate/Cotality).
Rate hikes in February and March 2026 have introduced fresh uncertainty into the market. While the overall trajectory has flattened, demand is shifting toward affordability and high-density options.
Which property types are still growing?
Apartment prices and inner-suburb villa units have seen recent increases. In outer suburbs, house prices are rising as first-home buyers and investors seek entry-level opportunities (Cotality).
Performance of the affordable segment
Properties valued under $800,000 are showing mixed results. Some areas are seeing price declines due to oversupply and lower investor activity, while others are supported by infrastructure projects and first-home buyer incentives (Cotality).
Current valuation forecasts for 2026
KPMG projects Melbourne house prices will rise 6.6% and units 7.1% in 2026. Conversely, ANZ Research revised its forecast to a 1.7% fall for 2026 following the March rate hike, citing rising inflation and geopolitical tensions (KPMG, ANZ Research).
The forecast divide
There is a significant discrepancy between analysts. While Domain projects a median house price of $1.17 million by the end of 2026, ANZ Research suggests Melbourne is facing a correction before potential improvement in 2027 (Domain, ANZ Research).
Frequently asked questions
What is the current median house price in Melbourne?
Melbourne’s median house price rose from approximately $920,000 in January 2025 to between $1,020,000 and $1,050,000 by December 2025 (Cotality). Domain reported a median of $1,083,043 for the September 2025 quarter. The median dwelling value for all types was approximately $830,371 in January 2026 (Cotality, Domain).
Are apartments a better investment than houses right now?
Units are forecast to rise 7.1% in 2026, which KPMG suggests will outpace all capital cities except Darwin. This growth is supported by a recent trend of increasing prices for apartments and villa units in inner suburbs, while some outer-suburb houses face oversupply issues (KPMG, Cotality).
How does Melbourne’s pricing compare to Sydney?
The median house price gap between Melbourne and Sydney now exceeds $600,000. This represents a historically wide discount for Melbourne. Additionally, Melbourne’s median has recently dipped below Perth’s and sits only marginally above Adelaide’s, which is unusual for Australia’s second-largest city (RAG Context).
Will Melbourne house prices recover in 2027?
ANZ Research believes that Melbourne and Sydney are the only two capital cities likely to see year-on-year improvements in house price growth in 2027. This follows a predicted 1.7% fall in 2026 caused by RBA tightening and a drop in consumer confidence (ANZ Research).
Questions to ask your agent
- How has the buyer profile changed in the affordable segment since the March rate hike?
- What is the current ratio of villa units to standard houses selling in this specific corridor?
- Which local infrastructure projects are currently supporting price resilience in this suburb?
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.