Melbourne Property Market Heating Up in 2025
Melbourne’s property market has flicked from neutral to warm faster than many pundits expected. Just six months ago sentiment was subdued; today agents are reporting busy opens and competitive bidding, and the data backs them up. If you’re looking to buy, upgrade or invest, now is the moment to get finance ducks in a row—because competition is returning with gusto.
Why activity is surging
CoreLogic’s auction trackers show Melbourne clocking a preliminary clearance rate of 72.4 percent for the first weekend of June—the fifth straight week above 70 percent and the highest volume of auctions so far this year at 1,547 homes . Anything north of 60 percent is historically associated with rising prices, so this streak is a clear sign of market momentum.
Fresh numbers on prices and rents
While prices haven’t rocketed, the trajectory has turned positive. CoreLogic’s May Home Value Index puts the median Melbourne dwelling value at $786,158, up 0.2 percent month-on-month yet still 5.4 percent below the 2022 peak—meaning buyers can still find relative value before any full-blown upswing . On the rental side, SQM Research pins the city’s vacancy rate at 1.7 percent for May, well under the 3 percent “balanced-market” threshold and tightening from April’s 1.8 percent . Low vacancies are boosting yields and luring investors back.
Outer suburbs leading the charge
Growth is far from uniform. New analysis shows 38 percent of suburbs located 20 km or more from the CBD recorded price gains in the past year, compared with just 4 percent inside the five-kilometre ring . Affordable corridors such as Hume, Casey, Frankston and Melton are benefitting from infrastructure upgrades like the Suburban Rail Loop and state planning reforms designed to unlock higher-density housing near transport. For many buyers those areas now represent the only realistic entry point—another demand tail-wind.
Five forces stoking the rebound
Cheaper credit. The Reserve Bank’s May cut took the cash rate to 3.85 percent, and a follow-up move is widely expected as inflation drifts toward the target band . Lower repayments lift borrowing power and buyer confidence.
Population growth. Victoria reclaimed top spot for interstate migration in 2024; new arrivals are spilling from rentals into purchases as weekly rents jump.
Investor return. Gross yields above 4 percent in many middle-ring townhouses now beat term-deposit rates.
Limited stock. Listing volumes remain roughly 15 percent below the decade average, giving sellers the upper hand.
Relative affordability. With Sydney’s median still about $400k higher, interstate investors and remote workers see Melbourne as the bargain big city.
Suburbs to keep on your radar
Craigieburn & Mickleham (Hume): House-and-land packages plus upcoming freeway and rail upgrades.
Cranbourne & Clyde (Casey): Rapid population growth, new schools and hospitals, median prices still under $750k.
Frankston & Seaford: Bayside lifestyle, ongoing hospital redevelopment, and Mornington Peninsula tourism halo effect.
Melton South & Cobblebank: Star performer in ABS population tables; fast train link mooted to cut CBD commute under 35 minutes.
These pockets offer a mix of affordability and future infrastructure that could translate into above-average capital growth over the next cycle. Always do suburb-level due diligence before committing.
Financing to move fast
With bidding wars back, conditional approvals are no longer enough. Get a fully assessed pre-approval so you can sign a contract on the spot. Start by running the numbers through our Borrowing Power Calculator—it updates automatically for every 0.25 percent rate change. Many clients are opting for split loans, locking part of their mortgage while keeping a variable portion to benefit from further RBA cuts; see our explainer on fixed vs variable loans for pros and cons. If you already own, tapping existing equity might fund a deposit without selling in a rising market.
Final word
Clearance rates in the high-60s to low-70s, accelerating demand in growth corridors, ultra-tight rental conditions and the prospect of cheaper money combine to make Melbourne a market on the move. Prices are still below their 2022 highs, but the window for negotiating on your terms is narrowing. Take the time now to organise finance, crystalise your budget and shortlist suburbs that fit both lifestyle and growth potential. When the right listing appears, you’ll be ready to act decisively—and Money Wise Lending is here to make sure your loan approval is the least stressful part of the journey.
Disclaimer: This article is general information only and not financial advice. Seek personalised advice before acting on any information presented.
