Melbourne’s property market has continued to show balanced conditions through the early weeks of May, with buyer demand remaining steady despite a further interest rate rise and growing discussion around housing affordability following this month’s Federal Budget.

While the recent Reserve Bank decision has added further pressure for borrowers, market activity across Melbourne’s eastern suburbs has remained relatively resilient. Buyers are still active, however decision making has become more measured as affordability and borrowing capacity continue to influence confidence.

However, Noel Jones Director Rod Burton is finding that “there are still plenty of active buyers in the market,” although buyers are becoming more educated, informed and selective in their decision making.

Recent analysis from REA Group and PropTrack shows national home prices continued to rise through April, although at a slower pace than earlier in the cycle. Auction competition has also softened slightly compared to what we saw through 2025, reinforcing a shift towards a more balanced market.

Well-presented and correctly priced homes are still attracting solid enquiry, particularly in tightly held family-focused suburbs where supply remains relatively controlled.

This week’s Federal Budget also placed housing firmly in the spotlight, with significant discussion around affordability, investor activity and housing supply.

The Government announced proposed changes to negative gearing and capital gains tax arrangements for future investment properties, alongside further measures aimed at supporting first home buyers and increasing housing supply.

Treasurer Jim Chalmers described the reforms as measures designed to “level the playing field for workers and first home buyers,” while continuing to support investment in new housing supply.

At the same time, rental conditions remain tight across many parts of Melbourne, with low vacancy rates and continued demand underpinning investor interest despite the higher rate environment.

What we are continuing to see is a market that has not stopped, it has simply shifted pace.

Buyers are taking more time, asking more questions and becoming increasingly selective, however quality homes continue to stand out, particularly when presentation, pricing and marketing strategy are aligned.

As we move further into the cooler months, stock levels traditionally begin to tighten. While this can make the market feel quieter overall, it can also create strong opportunities for sellers, with less competition helping quality properties capture greater buyer attention.

Overall, Melbourne’s market can best be described as stable, steady and more considered.

For buyers, sellers and investors alike, informed decision-making and strong local guidance remain more important than ever.

For tailored advice based on your property and current market conditions, speak with your local Noel Jones office.

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