Melbourne’s market steadies as population growth and lending rebound.

Melbourne’s market fundamentals are continuing to improve, driven by a strong pickup in population growth through the back of 2024. Victoria accounted for around one third of the nation’s total growth, led largely by overseas migration. This return of steady inflows has translated to an uplift in unit prices across all areas, even as the market works through some short-term uncertainty.

Both unit and house prices have appreciated in the first quarter of 2025, representing a strong start to the year with unit values increasing strongly in the inner and outer rings. Lending activity is also trending upwards. The number of new housing loan commitments is rising, with owner occupiers leading the charge and, somewhat unexpectedly, investors are also returning to the market. The uptick in investor activity is notable given Victoria’s challenging tax and levy environment. Together, these shifts suggest a stabilising market with firmer foundations heading into the second half of the year.