Melbourne housing market update [video] | April 2026

Key takeaways

Melbourne's housing values have fallen for four straight months, dropping another 0.2% in March and bringing the total decline since late 2025 to 0.9%.

Expensive houses are leading the downturn, with premium-tier values plunging 1.9% this quarter, while units have proven much more stable with only a minor 0.4% dip.

The market has shifted in favor of buyers as property listings rise above long-term averages, providing more options and weakening the selling pressure for vendors.

Melbourne’s housing market recorded a 0.2% decline in March, marking the fourth consecutive month of falling dwelling values.

This persistent weakness has resulted in a cumulative decline of 0.9% since November 2025.

The downturn is primarily concentrated in the detached housing sector, while units have shown a relatively milder contraction during this period.

The market performance is increasingly divided by value tiers.

The more expensive end of the market is recording more substantial falls, while demand remains more resilient at affordable price points.

Note: This defensive shift is a direct response to eroding borrowing power and heightened cost-of-living pressures affecting the Victorian capital.

Melbourne Market Performance

Diverging trends between houses and units, as well as across different price quartiles, highlight the current sensitivity of the Melbourne market to high interest rates.

Source: Cotality, April 2026

Affordability and Serviceability Constraints

Melbourne's property landscape is facing a challenging mix of cyclical and external headwinds.

With serviceability buffers requiring new borrowers to demonstrate an ability to repay loans at approximately 9%, the pool of active buyers is naturally shrinking, particularly for higher-valued detached homes.

The 1.9% drop in upper quartile house values over the March quarter reflects the impact of these borrowing constraints.

While first-home buyers are active in the lower quartiles, the diminishing impact of stimulus—coupled with rising living costs—suggests that even the more affordable segments are losing some of their earlier momentum.

Supply Dynamics and Future Outlook

One of the most significant factors influencing Melbourne's price trajectory is the lift in advertised supply.

Total stock levels are now tracking slightly above the five-year average, providing buyers with more choice and reducing the urgency to purchase, which in turn leads to more room for negotiation.

Source: Cotality, April 2026

The outlook for Melbourne through 2026 remains cautious. While the labor market acts as a key stabilizer by supporting income security and preventing forced selling, the near-term balance of risks is tilted to the downside.

Broad-based price gains look limited as the market remains sensitive to interest rate uncertainty and cost-of-living shocks.

Note: We expect affordable segments to hold up better, while premium segments will continue to face headwinds from borrowing constraints.

About Tim Lawless Tim is Research Director at Cotality (formerly CoreLogic), analysing real estate markets, demographics and economic trends across Australia. Visit www.corelogic.com.au