A new year is upon us, and with that comes an array of forecasts relating to Melbourne’s property market, and key factors influencing it in 2025 and beyond.
With core inflation falling to its lowest level since December 2021, and a February interest rate cut looking more likely, many economists and property experts agree that Melbourne’s property market is poised for a recovery.
After a period of underperformance relative to other Australian capitals, growth forecasts across the next few years are looking strong. Dr Brendan Rynne from KPMG is predicting the city’s median house price will increase by 3.5% in 2025 and by 6% in 2026. For units, the growth is expected to be 4.7% in 2025 and 7.1% in 2026. Similarly, Oxford Economics, a leader in global forecasting have released a three-year forecast that see Melbourne’s price growth at 21% for houses and 20% for units. This would see our housing market switch gears from one of the nation’s worst performing in the past two years to one of its best by the end of 2027.
Respected property expert Michael Yardney recently compared Melbourne’s current market trajectory to what was seen in Brisbane and Perth in recent years. Both cities experienced periods of underperformance but later saw significant capital growth as their markets recovered; he suggests Melbourne’s rebound will mirror this. With strong fundamentals in place, Melbourne’s future is looking bright, and buyers are advised to take advantage of current market conditions before interest rates begin to fall, prices rise, and the market catches up.
Results from the REIV across the past quarter show many of Melbourne’s eastern middle-ring suburbs are already experiencing growth; these include locations where Noel Jones have strong representation, including Blackburn (houses +6.3%, units +25.7%), Box Hill (units +8.8%) and Mitcham (houses +4.3%). This is driven by driven by both a strong demand for quality family homes in desirable school zones, and units and townhouses that offer more affordable options for buyers looking to get onto the property ladder.
To discuss your 2025 property goals, contact your local Noel Jones agent via phone or at noeljones.com.au
