Melbourne’s Property Market Showing Strong Signs of an Imminent Recovery

Melbourne’s property market is showing strong signs of momentum, with faster sales, rising rents, and increasing buyer competition reshaping the landscape.

What could the RBA’s recent 0.25% rate cut in May 2025 mean for the market, particularly if interest rates fall by a full 1% over the course of 2025?

1. 𝗠𝗲𝗱𝗶𝗮𝗻 𝗗𝗮𝘆𝘀 𝗼𝗻 𝗠𝗮𝗿𝗸𝗲𝘁:

Melbourne saw a 11% drop in median days on market from this time last year according to CoreLogic (Cotality), the second largest drop off all capital cities, signaling quicker sales and growing buyer interest.

Source: CoreLogic

2. 𝗦𝗮𝗹𝗲𝘀 𝗩𝗼𝗹𝘂𝗺𝗲𝘀 𝗦𝘂𝗿𝗴𝗲:

Sales volumes in Melborune increased by 7.8% in the 12 months to April, the second-highest growth among the capitals. In comparison, the combined capitals saw an average increase of just 1.2%.

Source: CoreLogic

3. 𝗥𝗲𝗻𝘁𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗥𝗶𝘀𝗲:

As of May 12, Melbourne house rents climbed 0.9% over the past four weeks, according to SQM Research. With national rents falling by -1.1% in the same period, this points to an outsized level of demand for rental properties in Melbourne compared to the rest of the country.

Source: SQM Research

4. 𝗔𝘂𝗰𝘁𝗶𝗼𝗻 𝗖𝗹𝗲𝗮𝗿𝗮𝗻𝗰𝗲 𝗥𝗮𝘁𝗲𝘀 𝗧𝗿𝗲𝗻𝗱𝗶𝗻𝗴 𝗨𝗽:

Clearance rates in Melbourne have been climbing, hitting 68.7% on May 12, up from 66.8% on May 4 and 60.5% on April 27, indicating increasing buyer competition week over week.

Source: CoreLogic

5. 𝗤𝘂𝗮𝗿𝘁𝗲𝗿𝗹𝘆 𝗚𝗿𝗼𝘄𝘁𝗵:

According to PropTrack (REA), Melbourne led the nation with 1.2% growth over the quarter, just ahead of Sydney at 1.1%. This contrasts with CoreLogic’s data, which places Darwin at the top, with Melbourne tied at equal second.

Melbourne quarterly property value growth

Source: CoreLogic

6. 𝗡𝗲𝘄 𝗟𝗶𝘀𝘁𝗶𝗻𝗴𝘀 𝗗𝗿𝗼𝗽:

New Melbourne property listings have decreased by 16.5% compared to this time last year, and total listings are down by 2.3%, indicating tight supply and higher competition for available properties. When paired with rising demand, this limited supply creates upward pressure on property prices.

Source: CoreLogic

7. 𝗧𝗵𝗲 𝗔𝗳𝗳𝗼𝗿𝗱𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗙𝗮𝗰𝘁𝗼𝗿:

Property values in Melbourne remain 5.4% below their March 2022 peak and currently sit below the median for Sydney, Brisbane, Canberra, Adelaide and Perth across all dwelling types. A relatively low ranking by historical standards.