“Forecasts suggest 4% to 6% growth for 2026. However, market segments are behaving differently, so focus on your specific budget and long-term needs.”
Melbourne house price forecasts for 2026 carry more uncertainty than usual given the rate rise environment. Property prices may rise or fall depending on market conditions, and any forecast should be read as a probability estimate rather than a prediction.
What the forecasts say
KPMG is forecasting approximately 6% Melbourne house price growth for 2026. Domain is forecasting capital city houses broadly up 6%, with Melbourne included. SQM Research and PropTrack are forecasting 6–10% growth for capital cities collectively, though Melbourne’s performance relative to the average depends heavily on interest rate outcomes and supply.
The two-speed Melbourne market
Melbourne’s property market in 2026 is behaving as two markets. Premium suburb properties — particularly $1.5M+ in the inner east and bayside — are facing genuine pressure as rising rates reduce borrowing capacity at the top end. Entry-level and inner-city units are showing stronger activity, supported by rental yield improvement and first home buyer scheme accessibility.
The headwinds
Three RBA rate rises have reduced borrowing capacity materially. ANZ Research has forecast Melbourne house prices to fall 1.7% in 2026 — the most bearish of the major forecasters — driven by the rate rise cycle and investor sentiment. Multiple credible forecasters hold contradictory views.
What this means for a decision to buy
Trying to time the Melbourne property market with precision is difficult and carries significant risk of inaction. The more productive question for most buyers is: does the property I’m targeting, at today’s price, suit my needs and budget over a 5–10 year hold? If yes, short-term price movement is a secondary consideration.
→ You may wish to speak with a licensed mortgage broker to assess your personal circumstances. This is general information only. Individual circumstances vary and scheme details change regularly. Verify current eligibility, caps, and terms with official sources before making decisions. Speak with a licensed mortgage broker for advice tailored to your situation. All loans are subject to lender approval.
Sources: KPMG, Australian Property Market Forecasts 2026; Domain, Property Price Forecast 2026; ANZ Research, Property Market Outlook 2026; CoreLogic, Melbourne Dwelling Values May 2026.
