Key takeaways
KPMG’s newest Residential Property Outlook pins Melbourne as the standout performer in 2026.
They expect house prices in Melbourne to climb 6.6%, adding approximately $64,900 to the current median of $983,000—that’s nearly $178 a day.
On the unit front, a 7.1% surge is forecast, boosting the typical unit from $609,000 by over $43,000, and outpacing all capitals except Darwin.
KPMG’s newest Residential Property Outlook pins Melbourne as the standout performer in 2026.
They expect house prices in Melbourne to climb 6.6%, adding approximately $64,900 to the current median of $983,000—that’s nearly $178 a day.
On the unit front, a 7.1% surge is forecast, boosting the typical unit from $609,000 by over $43,000, and outpacing all capitals except Darwin.
A Snapshot: City-by-City Growth Projections for 2026 (KPMG)
| Capital City | House Price Growth | Median House Price* | House Price $ Change | Unit Price Growth |
|---|---|---|---|---|
| Melbourne | 6.6% | $983,000 | +$64,878 | 7.1% |
| Sydney | 4.2% | $1.564M | +$65,688 | 6.1% |
| Brisbane | 3.1% | $1.067M | +$33,000 | 1.5% |
| Adelaide | 5.1% | $916,000 | +$46,716 | 3.7% |
| Canberra | 4.8% | $959,000 | +$46,000 | 5.6% |
| Darwin | 5.1% | (not specified) | +$30,804 | 7.3% (units) |
| Hobart | 1.7% | $710,000 | +$12,000 | 2.7% |
*Based on PropTrack medians
Why Melbourne Tops the Table
In my mind there are a few logical reasons explain why Melbourne is poised to outpace others:
-
Affordability Meets Demand
Detached houses may still feel out-of-reach for many—that’s pushing buyers toward well-located, more affordable family friendly villa units and apartments, spiking demand and elevating growth potential. -
Tight Supply, Lagging Approvals
Housing supply remains constrained. Even as building approvals tick up, completions lag behind - especially taking into account Melbourne's strong population growth. This imbalance fuels price growth. -
Building Momentum with Rate Cuts
KPMG’s optimistic numbers tie strongly to anticipated interest rate reductions over the next six months - increasing borrowing capacity and igniting buyer and investor confidence . -
Investors Eyeing Melbourne
Many property investors and buyer advocates and investors are actively repositioning into Melbourne—keen to catch the anticipated rebound. Unfortunately, many interstate buyers' agents don't understand the Melbourne market well enough and are herding their clients into the wrong locations. -
Trail of the Rebound
After being one of the weaker markets post-Covid, Melbourne is now set for a v-shaped recovery, supported by economic fundamentals, migration, and affordable access- Also read:House Prices Rise Everywhere Over July | Latest Housing Market Stats Dr. Andrew Wilson
- Also read:52 years of valid reasons not to invest
- Also read:Why Testamentary Trusts Aren’t Just for the Rich: A Guide to Safeguarding Your Legacy Introduction
- Also read:Why the ALP’s Grand Plan to Build 1.2 Million Homes Is Destined to Fail – A Reality Check
- Also read:Here’s how I’ll be investing in property in 2023
- Also read:House Prices Rise Everywhere Over July | Latest Housing Market Stats Dr. Andrew Wilson
Domain also believe Melbourne will have strong growth over the next year.
Domain’s latest Price Forecast Report for FY25-26 reveals that Australia’s property market is expected to see continued price growth over the next 12 months, with major capital cities Melbourne and Sydney driving national trends.
Dr Nicola Powell, Chief of Research and Economics at Domain expects Melbourne forecast to lead the charge over the next year, as the Melbourne property market typically respond more quickly to interest rate changes.
Meanwhile, Adelaide and Perth – standout performers over recent years – are expected to experience slower positive growth as affordability constraints intensify.
Source: Domain’s latest Price Forecast Report for FY25-2
Get my full report on what's ahead for the Melbourne property market.
I believe Melbourne will lead the 2026 property race because of the perfect alignment: rising buyer confidence on the back of expected rate cuts, underserved housing supply, strong migration, and units offering an accessible entry to a city ripe for a comeback.
Get your free copy of my new report What’s Next for Melbourne's Property Markets. A Strategic Perspective by clicking here and stay one step ahead of the Melbourne market.
- Why the smart money is already investing in Melbourne property market
- The forecast in Melbourne's property prices in 2026
- Key drivers that move the Melbourne property market
- Lessons from Perth and Brisbane. What we can learn from these two markets.
- Melbourne areas to approach with caution.
- The locations and property types likely to outperform in 2026
- What savvy investors are doing now to capitalise – and how you can too
The market’s changing fast – learn why now is a unique opportunity for strategic investors and homebuyers to get ahead.
