How did Melbourne unit values perform in Q1 2026?

The Melbourne unit median reached $659,500 in Q1 2026, a 1.1% increase on the prior quarter. Growth has slowed noticeably compared to the end of 2025, and the distribution of that growth across the city looks quite different.

Why is price growth shifting back to the inner ring? 

Value growth in Q1 2026 was concentrated in the inner ring, up 1.4%, while the middle and outer rings saw comparatively modest gains of 0.4% and 1.1% respectively. That is a notable reversal from the pattern that dominated Q4 2025, when middle and outer ring units were the clear outperformers.

The driver is relative affordability. With inner ring units now priced meaningfully below both middle and outer ring products, demand is being funnelled toward lower priced stock. That dynamic is particularly evident among first home buyers accessing the 5% Deposit Scheme, who are primarily constrained by price points rather than location preference.

What does the unit to house price ratio tell us? 

Melbourne’s unit to house price relativity has reached 50% for the first time, with median house prices now 50.3% more expensive than units. That gap is significant for affordability driven buyers and helps explain why unit demand has remained relatively resilient even as broader market confidence has softened.

It also appears to unwind some of the relative strength the unit market showed toward the end of 2025.

How will the new tax settings create a two speed unit market? 

The new tax settings are likely to produce a divide within Melbourne’s unit market. Existing stock, much of which has already saturated the market, will lose access to negative gearing and CGT concessions, placing downward pressure on established unit prices. New stock retains access to both negative gearing and the existing 50% CGT discount, giving new infill product a clear pricing and investment advantage.

However, falling established unit prices carry the potential to drag broader median figures down and exert indirect pressure on new unit pricing.

Want the full picture?

This article draws on findings from RPM Group’s VIC Metro Market Intelligence Report – Q1 2026. Access the complete data and market forecasts in the full report.