Melbourne housing market surges as property boom returns

Melbourne’s property market has roared back to life, with almost 90 per cent of suburbs recording price growth in the past quarter, the city’s fastest recovery in more than two years. Picture: Manuela Cifra

Melbourne’s housing market has turned a corner, posting its fastest quarterly rise in more than two years and marking the end of the city’s post-pandemic slump.

PropTrack’s latest quarterly figures show 371 Melbourne suburbs recorded higher house values in the September quarter as part of a “healthy recovery”, while only 36 fell or held flat.

That means almost 90 per cent of suburbs are now in growth mode, confirming momentum has returned across every corner of the city.
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The biggest jump for houses came in Hawthorn, where the median house price surged $223,000 (9 per cent) to $2.81m.

Marshall White Boroondara director Chris Barrett said the sharp rise reflected renewed demand for prestige family homes.

“Hawthorn has always been one of Melbourne’s most in-demand suburbs,” Mr Barett said.

Mr Barrett said more high-quality family homes were hitting the market as long-time owners and baby boomers downsized, creating rare buying opportunities for families and professionals.

CLICK HERE TO SEE HOW YOUR SUBURB PERFORMED DURING THE SEPTEMBER QUARTER

93 Liddiard St, Hawthorn (Sold in September for $3.7m)

“Since Covid, a lot of owners held onto big homes because everyone wanted space, but that mindset is shifting,” he said.
“The next generation is stepping in and paying for quality.”

Hawthorn was the only inner-east suburb among Melbourne’s top-growth performers, outpacing a list dominated by northern and outer-south-east postcodes.

Marshall White Boroondara director Chris Barrett says Hawthorn’s sharp rise shows prestige buyers are back, as downsizers and families compete for blue-chip homes.

28 Melville St, Hawthorn (Sold: $2.5m)

Coolaroo followed with an $41,000 (8 per cent) lift to $589,000, while Frankston North rose $43,000 (7 per cent) to $647,000.

The results show both the prestige and affordable ends of Melbourne are rising in tandem.

Other strong performers included Wheelers Hill, where unit values jumped 20.2 per cent, and Campbellfield and Chelsea Heights, both recording quarterly gains near 9 per cent.

Middle-ring suburbs such as Preston, Wallan and Strathtulloh climbed about 3 per cent, in what economists have called “steady, sustainable growth”.

7 Lakewood Boulevard, Melton (Sold: $594,000)

26 Pittosporum Grove, Doveton (Sold in September: $660,500)

PropTrack senior economist Angus Moore said Melbourne, once the slowest of Australia’s capital markets, had clearly shifted gears in 2025 as lower interest rates, stabilised interstate migration and renewed buyer confidence lifted demand.

“We’re seeing consistent growth again. Prices are moving up month after month,” Mr Moore said.

“It’s not a boom, but it’s a healthy recovery built on renewed affordability and buyer depth.”

PropTrack senior economist Angus Moore says Melbourne has shifted gears in 2025, with easing interest rates and stabilised migration driving steady, consistent price growth.

3 Warneet Rd, Warneet (Sold in September for $661,000)

The PropTrack Home Price Index shows wider Melbourne values rose 1.4 per cent in the September quarter, taking the city’s prices 3.5 per cent higher since January, the strongest stretch since 2022.

Across the nation, the housing divide that opened during the pandemic is narrowing.

Adelaide, Brisbane and Perth — which nearly doubled in value between 2019 and 2024 — have cooled to quarterly growth of 0.3 to 0.5 per cent, while Melbourne’s momentum continues to build.

With a median dwelling value around $805,000, the city now sits roughly 20 per cent below Sydney, drawing both investors and first-home buyers back in search of better value.

“The smaller capitals that had the big run are losing pace, and Melbourne and Sydney are catching up,” Mr Moore said.

“We’re seeing a levelling out of the national market, and that’s healthy.”

15 Authentic Ave, Cranbourne South (Sold in September $830,000)

Buyers’ advocate Frank Valentic says Melbourne is now the “comeback capital”, with rising confidence, rate cuts, and strong auction momentum pushing prices higher across the city.

Advantage Property Consulting director Frank Valentic said the turnaround had been swift and decisive.

“Melbourne is officially past the bottom of the cycle,” Mr Valentic said.
“Buyers who were waiting for the bottom have missed it. The three rate cuts we’ve had this year have reignited confidence and turned the city back into a sellers’ market.”

Mr Valentic said this rebound felt markedly different to the Covid-era boom that sent prices soaring.

“That boom was fuelled by panic and record-low rates,” he said.
“This one’s driven by genuine confidence and affordability.
“Buyers are informed, but they’re acting fast.”

5/64-66 Stewart Grove, Campbellfield (Sold: $346,000)

Mr Valentic said investor sentiment had also shifted, with growing interest from interstate buyers who now saw Melbourne as undervalued.

“We’re seeing strong inquiry from Brisbane and Adelaide investors who’ve built equity at home and are looking south for long-term growth,” he said.
“They see Melbourne as the comeback city.”

Buxton said one in five of his buyers were now using the five per cent First Home Guarantee, a key driver of renewed interest in the southeast and bayside markets.

“We’re seeing families who were renting in Bentleigh or Hampton East now buying in those same postcodes,” Mr Gigis said.
“Renewed competition is the best way to describe the Melbourne market right now.”

Melbourne’s housing market is heating up again, led by strong demand across both prestige and affordable suburbs as buyers and investors return in force. Picture: Jake Nowakowski

According to latest data in the Australian Bureau of Statistic’s National, State and Territory Population stats, Victoria recorded positive quarterly net interstate migration in March — the first time since the pandemic, and part of a broader population rebound driven by overseas migration.

The report also showed Victoria’s population grew 1.8 per cent in the year to March 2025, behind Western Australia (2.3 per cent) and equal with Queensland (1.8 per cent).

PropTrack forecasts suggest the city’s prices could rise another 5 to 10 per cent in the next year, if interest rates continue to ease and listings stay stable.

Top 10 Melbourne house suburbs September 2025 quarter

Source: PropTrack AVM data

Top 10 Melbourne unit suburbs September 2025 quarter

Source: PropTrack AVM data

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