Melbourne house prices: $1m median milestone likely to hit soon
PropTrack's Home Price Index report for July, released today, shows the city's typical house value now stands at $983,000, after a $24,000 (2.15 per cent) increase in the past 12 months.
Widely-anticipated future Reserve Bank rate cuts and strong population growth are tipped to fuel a strengthening market, and a similar jump in the coming 12 months would take the city past the $1m mark.
Separate data set from the Real Estate Institute of Victoria put the city's median house price at $1,004,500 in 2021, before it later decreased as interest rates rose. Their data shows it has yet to return to seven-figure territory.
PropTrack senior economist Anne Flaherty said Melbourne property prices had experienced a reversal in fortunes across the past six months.
'We do think that the median price per house in Greater Melbourne will hit that $1m mark,' Ms Flaherty said.
Further interest rate cuts would make borrowing more affordable, meaning buyers could spend more on a house, she added.
'We would expect following an August rate cut that has the potential to put some momentum for price growth,' Ms Flaherty said.
'And then of course if you look at just population growth trends, population growth is still very strong which is going to underpin housing demand.'
According to PropTrack, Melbourne's median house price has never before hit $1m.
Its highest-ever value was $992,000, in February 2022.
At the moment, Melbourne's typical house value is Australia's third-most affordable, behind Sydney on $1.564m and Brisbane at $1.067m.
And Melbourne's $609,000 typical unit price, including apartments, is the fourth cheapest in the nation, trailing Sydney on $860,000, Brisbane's $715,000 and Adelaide's $632,000.
Regional Victoria's median house price rose to $588,000 in July, while units increased to $414,000.
With Australian Bureau of Statistics data released yesterday showing the number of new houses being approved across Victoria grew just 1.4 per cent in June and the number of units plunged 6.1 per cent, Ms Flaherty warned the state was falling short of the number needed to meet the state's population growth.
'In the 2024 financial year there was an 18 per cent shortfall across Victoria in the number of new homes built compared to what was needed to accommodate growth,' she added.
Melbourne-based buyers agency Empower Wealth research and business analyst, Kevin Au, echoed these concerns.
'Despite the federal government's ambitious target of 1.2 million new dwellings over five years, Victoria's share of roughly 60,000 new homes per year may not be enough to ease supply constraints,' Mr Au said.
'High construction costs and labour shortages continue to hamper new development, keeping pressure on both prices and rental markets.'
But he said this would continue to drive demand for rental homes.
Property Investment Professionals of Australia chair Lachlan Vidler said the state's property market was regaining confidence particularly in Melbourne's outer suburbs and regional centres like Geelong.
'Strong population growth, low vacancy rates and improving affordability are driving renewed interest despite ongoing supply challenges,' Mr Vidler said.
AUSTRALIA'S PROPERTY PRICES SNAPSHOT JULY 2025
Houses:
Sydney. Median price: $1.564m.
Percentage increase or decrease across the past 12 months: 3.41%
Brisbane $1.067m 7.77%
Melbourne $983,000 2.15%
Perth $926,000 7.25%
Adelaide 916,000 9.48%
Units:
Sydney. Median price: $860,000
Percentage increase or decrease across the past 12 months: 3.21%
Brisbane $715,000 13%
Adelaide $632,000 8.39%
Melbourne $609,000 -0.56%
Perth $584,000 11.41%
Top five Victorian growth regions (for all dwellings combined, including apartments, units and houses):
Victoria's north west. Median price: $375,000
Percentage increase or decrease across the past 12 months: 5.03%
Ballarat $529,000 4.32%
Shepparton $469,000 4.12%
Bendigo $593,000 3.94%
Melbourne's north west $739,000 3.44%
Source: PropTrack Home Price Index July 2025.
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