M:
The Big Picture
Spring/25
Melbourne Residential
Sales
Melbourne residential sale transactions tallied to 26,975 in the second quarter of 2025, an upward movement of 4% from the previous quarter In the past year, the total number was 1% higher, reaching 111,310 sales This was influenced by the subdued price growth with many investors taking the opportunity despite the market anticipating further interest rates reductions. As a benchmark, over the past five years, the quarter tally averaged 26,646 sales and the annual average annual was 108,287 sales
Auctions
In the last week of June 2025, 962 residential auctions were held across Melbourne. According to Cotality, 68.2% of the homes were sold under the hammer Clearance rates above 70% suggest strong demand and a seller’s market, while a rate below 60% indicates weaker demand and a buyer’s market This result was higher than one quarter ago at 60 5%, when 1,364 auctions were held By comparison, the same quarter last year saw 62 4% sold, from 886 auctions
Total Number of Sales
Auction Clearance Rate
Average Days on the Market Melbourne Duration 71 days
Melbourne homes took an average 71 days on market - from the time they were listed to the day they went under contract - in Q2 2025 This duration was 76 days the quarter before and 67 days one year ago A lower number of days on market mean homes are selling fast with more desirable properties, while a higher number of days suggests a slower market with above market values Looking back, the fiveyear average has taken 67 days to sell a home.
Newly advertised property listings in Melbourne were 12 2% lower in the month of June 2025 than the equivalent period last year, according to Cotality This trended below the Australian average of -11.7% and below the -12.9% across Australian capital cities
Melbourne’s total number of listings in the month of June 2025 were 10.0% below the equivalent period last year, according to Cotality By comparison, the Australian average for total listings was -5.8% and across Australian capital cities was -4 4%
Residential property prices across Melbourne rose by 1 2% in the year ending Q2 2025, with a 2 3% increase recorded in the most recent quarter This brought the median residential value to $907,000, reflecting an upward trajectory in housing demand and growing resilience in the market. Annual residential price growth has averaged 3 3% over the past five years.
Change in Median Prices
Forecast for Median Prices Melbourne Price Outlook +4%
Looking ahead, McGrath Research forecasts Melbourne residential property prices to increase by 4% by the end of 2025, followed by a stronger 6% rise in 2026. These projections reflect ongoing demand from increasing population growth, lowered interest rates, improving consumer confidence and relative value for investors compared to other major Australian cities
Change in Residential Rental Vacancy Melbourne Vacancy 1.3%
Melbourne residential rental vacancy was recorded at 1 3% in Q2 2025, rising 10 bps in the quarter to total a 10 bps rise over the past year according to APM Generally, around 3% vacancy is considered a balanced market between rental supply and demand Below this equilibrium is considered to be an undersupplied pool of rental homes. Over the past five years, rental vacancy has averaged 1 7% per year
Yield -2 bps
Residential gross rental yields fell 2 bps in the Q2 2025 quarter to be 4 43% across Melbourne, while being 23 bps more than a year ago. Gross rental yields are a good initial measure of comparing the return of a property investment before expenses are deducted. A range of 4.00% to 5.00% is considered good for many properties located in capital cities, while below this, may indicate high property prices relative to rent, or low rental demand Gross rental yields have averaged 3 84% over the past five years
Change in Gross Rental Yield
from a year ago
Residential Rents Update
Melbourne residential rents remained stable in Q2 2025, while increasing 1 8% over the past year, to stand at $580 per week Low vacancy and high migration have kept rents elevated On average, over the past five years, rents grew 6 6% per year
Change in Median Weekly Rents
Rental Outlook +3%
As Melbourne continues to experience strong population growth and lowered vacancy, McGrath Research forecast sustained upward pressure on rents of 3% at the end of 2025, with a further 4% rental growth likely in 2026
Forecast for Median Rents
Definitions
Melbourne
Melbourne refers to the Greater Capital City Statistical Area or ‘Greater Melbourne’ as defined by the Australian Bureau of Statistics.
Guiding you home
Michelle Ciesielski Head of Residential Research, McGrath Research
michelleciesielski@mcgrath com au +61 414 694 220
www mcgrath com au