The Market Isn’t Mad. It’s misunderstood. Or is it?

WINTER 2025

Market mood

It’s winter. Cold bite-ty wind factor. That’s the Melbourne that I know. The market should reflect the season as it has been traditionally. But it isn’t. The Melbourne’s property market is moving through a much more interesting and nuanced shift. Growth is real. Demand is growing. But we’re still in early days. Let’s take a moment to breathe, zoom out, and reflect on what’s actually happening — and what that might mean for you.

The data story (mid-2025 snapshot)

Steady recovery: PropTrack’s latest Home Price Index shows the city’s $900,000 typical house has risen almost $9000 (1 per cent) so far this year, while the $588,000 median priced unit gained almost $12,000 (2.1 per cent).

Weak listings, rising demand: New listings are about 5% below the 5‑year average. Tight supply plus price-sensitive buyers equates to upward pressure thus keeping stock tight and buyer competition strong.

Rate cuts: 2 cuts in the last 5 months have pushed auction clearance rates above 70% in the last 5 weeks. Buyer confidence is returning.

What’s driving the market?

1. Interest Rates Near Their Peak
The RBA has paused rate hikes, and economists are hinting at rate cuts by the end of 2025. Historically, property markets respond well to that kind of forward sentiment.

2. Melbourne’s Population is Surging
A 2.7% population bump (the highest in the nation) equates to 142,000 people currently here in Melbourne is putting steady pressure on housing, particularly rentals and affordable homes. 

3. A Tale of Two Markets: Houses vs Units
Detached homes are leading the rebound, but with tight rental vacancies and low apartment construction, units may quietly become the comeback kid. 

4. Supply Bottlenecks
The Urbis led research and tabled at Property Council of Australia shows a 9,000 dwelling per year shortfall includes houses and townhouses (3,500) and apartments (5,500). However, broader targets suggest Victoria needs 80,000 new homes/year by 2034, while current approvals significantly lag.

What this means for you

Buyers : A low-to-mid-risk window: rates likely to fall, prices gently rising, but affordability still intact.

Sellers : You're in control, limited stock means less competition. But don’t wait too long, the window may close.

Investors : Positive signs emerging, tight vacancies, population growth, and supply gaps favour yields and long-term growth. Vacancy rates in this context is at National 1.2%, Victoria 1.8% and Western Australia 0.8%

Sources: CoreLogic, PropTrack, Charter Keck Cramer, Domain, Urbis, Property Council of Australia, UDIA, Australian Bureau of Statistics [ABS] REA and REIV.

Insight & Reflection

After the long slumber post-Covid, Melbourne market is finally waking up The kind of moment that rewards calm heads, clear goals and good advice.

So, if you’re wondering “Should I act now, or wait?”
The better question is, “Am I clear on what I want, and am I ready to move wisely?”
Because smart buying isn’t about timing the market, it’s about timing your life.

Let’s talk when you're ready.