Buyer confidence in Melbourne’s eastern suburbs remains selective in April 2026. While the top end of the market is showing resilience, particularly when compared to other capitals, a two-speed market is evident. Affordable properties and those in gentrifying areas are currently outperforming the city median, driven by first-home buyers and investors. Overall, the market is not experiencing widespread, unbridled enthusiasm, but targeted demand persists.
The Melbourne property market presents a nuanced picture in early 2026. While the median house price gap between Melbourne and Sydney exceeds $600,000 (Cotality, January 2026), Melbourne’s median has recently dipped below Perth’s, an unusual position for Australia’s second-largest city. This suggests that while broad confidence isn’t absent, it’s certainly more discerning than in previous cycles.
What’s happening with buyer demand in the eastern suburbs?
We’re observing a two-speed market. Properties in the more affordable segment – under $800,000 – are attracting strong interest, particularly from first-home buyers and investors. This is especially true in areas undergoing gentrification, such as Frankston and Cheltenham, where price appreciation of 8–15% has been recorded over the past 2–3 years (Bamboo Routes, January 2026). At the higher end, demand is still present, but buyers are exercising greater caution and selectivity.
How does Melbourne compare to other capital cities?
Melbourne is currently trading at a discount compared to Sydney, with a price gap exceeding $600,000 (Cotality, January 2026). Perth’s house price growth is forecast at just 1.6% for 2026 (KPMG) as affordability constraints bite, and Brisbane, Perth, and Adelaide are all expected to slow their growth sharply from 2026–2027. This relative stability, or even slight underperformance, in Melbourne could attract buyers seeking value compared to these other markets.
What impact is seasonality having on sales?
Autumn (March–May) is historically the second-strongest selling season in Melbourne, offering a balance between buyer numbers and reduced competition from other vendors. While Spring (September–November) remains the peak period, Autumn can provide a favourable environment for achieving a strong result. We’re seeing good enquiry levels at open homes, but buyers are taking their time and conducting thorough due diligence.
The appraisal spread
The biggest challenge right now is the widening gap between vendor expectations and buyer willingness to pay. Appraisals are becoming more complex, with a greater range of comparable sales influencing valuations. This ‘appraisal spread’ means setting a realistic price is more critical than ever to attract genuine interest and avoid a prolonged campaign.
Frequently asked questions
Will interest rate changes affect buyer confidence?
While the Reserve Bank of Australia’s cash rate influences buyer sentiment, it’s not the sole driver. Affordability is a key concern, and buyers are carefully assessing their borrowing capacity. Any further rate increases could dampen enthusiasm, particularly for higher-priced properties, but the market has demonstrated resilience to recent changes.
Are new apartments impacting house prices?
New-build properties account for roughly 15–20% of all residential listings in Melbourne (Bamboo Routes, January 2026), concentrated in specific corridors like the CBD and Southbank. This supply is putting downward pressure on apartment prices in those areas, but has less direct impact on the established house market in the eastern suburbs.
What’s happening in gentrifying suburbs?
Suburbs like Preston, Reservoir, and Footscray are experiencing significant gentrification, with price appreciation of 8–15% over 2–3 years (Bamboo Routes, January 2026). Level-crossing removals and station upgrades are driving this growth, attracting younger professionals and boosting local economies.
Is now a good time to sell if I’m downsizing?
Downsizers are a significant segment of the market, and demand for smaller, more manageable properties remains strong. The key is to have a clear plan for your next move and to work with an agent who understands the specific needs of downsizers in your area. A well-presented property will always attract interest.
Questions to ask your agent
- Can you provide a detailed comparative market analysis, showing recent sales of similar properties in my area, and how my property stacks up against them?
- What is your strategy for attracting qualified buyers to my property, beyond simply listing it online?
- Based on current market conditions, what is a realistic price range for my property, and what factors could influence that range?
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.