Melbourne is tipped to deliver some of the strongest price growth in the country over the next two years, with Westpac forecasting dwelling prices to rise 4% in 2025 and another 10% in 2026.
If this plays out, the city’s median house price will climb by more than $100,000—taking it to an estimated $1,059,810 by the end of 2026.
While Sydney continues to dominate headlines, Melbourne is quietly positioning itself as the comeback city. Double-digit growth is on the cards, and the momentum is expected to shift strongly in Melbourne’s favour as population growth, lifestyle appeal, and relative affordability converge to drive demand.
For buyers, however, the psychological barrier of $1 million is becoming very real. As Canstar’s Sally Tindall noted, “Melbourne’s median house price could go above the million-dollar mark, which for many first-home buyers will feel like the goal posts keep moving further away.”
What this means for buyers & investors?
- First-home buyers: Rising prices mean getting into the market sooner rather than later could save you from chasing moving goal posts.
- Investors: Strong growth forecasts highlight Melbourne as a key opportunity city, especially with double-digit gains projected.
- Upsizers/downsizers:Increased equity and competition could make timing and strategy more important than ever.
The bottom line
Melbourne is on track to not only recover from recent downturns but to surge ahead, breaking through the million-dollar median. For buyers, preparation, research, and smart negotiation will be critical. For investors, Melbourne may well represent one of the most compelling opportunities nationwide in the years ahead.