Unit Values Hit a Three Year High

Overall unit values reached $656,500 in Q4 2025, a three year high and a 2% lift on the previous quarter. That compares to 1.8% growth for houses over the same period, marking a meaningful shift in relative performance across Melbourne’s dwelling types.

Policy Is Doing the Heavy Lifting

Rate cuts have helped lift price growth across the broader market, but policy is doing more of the work here. The 5% Deposit Scheme strongly favours medium and high density dwellings, particularly across Melbourne’s middle and outer rings where a significant share of stock sits under the $950,000 threshold. In the inner ring, effectively only high density products qualify under the scheme.

 

Middle and Outer Rings Are Leading the Charge

The standout performers were outside the inner city. Middle ring unit values hit $757,500, a four year high, with quarter on quarter growth of 2.9%. Outer ring units reached an all time median high of $650,000, up 2.5% on the previous quarter.

Both figures sit well above the inner ring’s 0.8% quarterly growth and the broader house market’s 1.8%, underlining where the scheme is having its most direct effect.

Confidence Has Returned Across Buyer Types

Three rate cuts through 2025 restored a level of confidence that had been missing from the market for some time. Migration data reinforces the demand picture, with Melbourne drawing buyers from other cities, Brisbane and Adelaide in particular.

Both owner occupiers and investors returned to the Victorian market at the end of 2025 with considerably more conviction than they showed six to nine months earlier. That broad based return of demand, combined with favourable policy settings, is what is driving the recovery.

What This Means for the Market

Melbourne’s unit market appears to be recovering in earnest. The combination of rate relief, targeted policy support, and returning demand from both local and interstate buyers has produced broad based momentum.

Want the Full Picture?

This article draws on findings from RPM Group’s VIC Apartments & Townhomes Market Report. Access the complete data and market forecasts in the full report.