Price Trends: Stabilisation With Pockets of Growth
After a couple of years of extreme volatility - hindered by rate rises, pandemic bounce-back, and inflation concerns - 2025 has thus far delivered a steadier price climate in Melbourne. The height of the peaks and lows of 2022-2023 is done and over, and it is replaced with nuanced and more persistent movements.
While growth has slowed compared to earlier peaks, certain inner-city and family-friendly suburbs are outperforming, particularly those with strong school zones, village-style amenities, or access to train lines. Apartments and townhouses have had a slower run, but in 2025, we're beginning to see a soft rebound in the unit market. Rising rental yields and lower purchase prices are drawing investor attention once again, particularly in areas like Footscray, Southbank, and Box Hill.
Buyer Demand: Confidence Is Returning - Cautiously
One of the highlights so far in 2025 is the return of cautiously optimistic buyer confidence. Buyers remain price-conscious, especially in relation to cost-of-living pressures, but open homes are more vibrant, and serious buyers are acting with more intent when they encounter a suitable property.
A lot of that can be credited to increased confidence when it comes to interest rates. With the banks in Australia having held back on rates for some months - and even hinting at possible cuts this year - potential buyers are subject to less stress but more security. That's resulting in longer campaign periods (especially for private sales), but better offers when they do come.
First-homebuyers are still active, especially in Melbourne's outer west and north, snapping up still-affordable prices and government subsidies. Downsizers are also back with force, typically seeking low-maintenance lifestyle houses near shops and transport.
Auctions are again having reasonable attendance, but they are hardly manic. Rather, more strategic, post-auction negotiations are being seen - a pattern that places even more onus on solid agent advice and pricing strategy.
What's Selling: Well-Presented Homes, Family Homes, and Smartly Priced Listings
2025 Buyers are appreciating presentation and functionality. Top-performing homes this year are move-in-ready open-plan layout family homes that include outdoor space and have factored in upgrades. Hard-to-beat homes that are reasonably priced are still attracting strong interest - often even multiple offers - despite a competitive market.
I always advise clients to invest in professional marketing, clean presentation, and clear pricing strategy. It can make a measurable impact on how quickly a house sells and what offers arrive at the front door
Investor Insights: Yield Is Back on the Radar
Having sat in the background for the majority of the past few years, property investors are once more coming into Melbourne's market, particularly in the townhouse and apartment segments. With vacancy rates clinging on and rents continuing to increase in much of the city, rental yields are on the return path and making some suburbs more appealing.
Units in well-connected metro areas are seeing the strongest resurgence, with suburbs like Brunswick, Preston, and Docklands gaining traction. There's also renewed interest in student accommodation as international enrolments rise across major universities.
What we're not seeing, however, is a return to speculative, short-term investing. Instead, today's investors are cautious, analytical, and focusing on long-term rental return and capital growth potential.
Looking Ahead: What to Expect in the Second Half of 2025
If the first half of 2025 has taught us anything, it's that Melbourne's real estate market has matured. We've moved beyond pandemic-era volatility and sharp market corrections, and we're now operating in a more balanced, informed environment.
To sellers, this means success will increasingly become a question of strategy, pricing, and presentation. Momentum will no longer suffice on its own to put your sale price in the money - you will need to create it. And the good news is that there are serious buyers, and if you are willing to sell, there are still good outcomes to be realized.
For upgraders and first-home buyers, however, the balance of the year 2025 may be more in their favour. Reduced competition, interest rate stability, and increased number of listings on offer make room to purchase well - but most sought-after homes are continuing to sell quickly, so planning needs to be accurate.
And for investors, increasing yield, steady rental demand, and incrementally rising confidence should unlock new opportunities - particularly in those areas that have fallen behind the market in recent years.
Conclusion: Navigating the Market with Local Knowledge
Whether you're a buyer, seller, or simply observing the market, staying connected to real trends - not media hype - can place you well ahead. Working day in, day out with Melbourne buyers and sellers, I listen beyond the stats. I know what's effective at open homes, which questions buyers are asking, and where demand is bubbling next.
If you're thinking about making a move, or just want to know what your property is worth in today's market, I'd be happy to provide a free, obligation-free appraisal and talk through your options. The second half of the year is shaping up to be steady, strategic, and full of opportunity for those who approach it with clarity and confidence.
Feel free to contact me at any time - I'm here to walk you through the market and make the best move.