What’s Really Happening in the Melbourne Property Market Right Now? [July 2025]

If you’ve been watching the property market lately — or just reading the headlines — you’ll know it’s a bit of a mixed bag.

Some suburbs are booming, others feel like they’re still waking up. Clients are asking me: “Have we hit the bottom?” or “Is it the right time to buy?” 

And truthfully, there’s no one-size-fits-all answer. But thanks to the latest July 2025 Housing Chart Pack from Cotality (formerly CoreLogic), we’ve now got some solid data to help make sense of it all — especially for Melbourne buyers, sellers, and investors.

Let’s break it down.

National Growth Is Back — But It’s Uneven

Across Australia, dwelling values are rising again. After a sluggish end to 2024, the national market lifted by 1.4% over the June quarter, and 3.4% for the financial year.

What does this mean?

It tells us the recovery is gaining traction. Regional areas are still slightly ahead in terms of growth, but capital cities are catching up — with momentum building through both May and June.

Markets like Perth, Brisbane, and Adelaide are charging ahead. But let’s turn the focus to Melbourne.

How’s Melbourne Performing?

Melbourne saw a modest 1.1% rise in the June quarter, with values nudging up 0.5% in June alone.

However, over the full 12 months, we’re still sitting slightly in the red — down –0.4%. And when compared to our market peak in March 2022, values are still 3.9% below that high.

What does this mean practically?

It means Melbourne is behind the national curve. But for buyers, that can be a good thing — there’s still time to act before the next wave of strong competition pushes prices up.

And let’s not forget: Melbourne is one of the most resilient property markets in the country. When it runs, it really runs.

Listings Are Low, But Demand Is Stirring

One of the big takeaways from the report is this: stock levels are tight.

Nationally, new listings are down nearly 12% compared to last year — the lowest June figure since 2020 (and we all remember 2020). Total listings are also well below average, and while Melbourne-specific numbers weren’t singled out, Victorian regional markets like Ballarat and Bendigo have seen a noticeable uptick in activity.

This low supply is a major driver of price stability. With not many properties hitting the market — and interest starting to rise again — the conditions are set for upward price pressure, particularly in well-located, family-friendly suburbs.

First Home Buyers Numbers Reducing

First home buyers are feeling the pinch.

The value of first home buyer lending fell by 3.4% over the March quarter, and they now make up just 29% of owner-occupier loans — the lowest share in over two years.

Affordability, borrowing power, and the property market that is heating up is creating tougher conditions. Not to mention that Government schemes are slow to update to be more accommodative, specifically, eligibility and price caps, with prices rising.  

But despite this, the portion is still above the long-term average in most states — so the demand is still there.

If you’re a first home buyer reading this: you're not alone. And there are strategies to help navigate this period - this is where a good broker can help fast track your entry into the property market. 

What About Lending Conditions?

Overall lending softened in early 2025. The total value of new loans (excluding refinancing) fell by 1.6% in Q1, with both owner occupiers and investors scaling back slightly.

But there’s nuance here.

Investor lending is still up 16% year-on-year, and variable interest rates are starting to fall. At the time of writing, the average new owner-occupier variable rate is 5.83%, and the RBA is expected to cut further in the coming months.

In other words, while some buyers are hesitating, others are quietly preparing to jump back in — especially if rates ease.

So… Where Are We Headed?

Melbourne may not be leading the pack, but it’s not falling behind either — it's in a transition phase. Price growth has returned, albeit gently. Listings are low, which keeps the floor under prices. First home buyer activity is cautious but present. Lending is softening, but likely to pick up if rates fall again.

If I had to sum it up in one sentence?

We’re seeing the early signs of a return to confidence which may start the next growth cycle that we had been accustomed to pre-2020.

Final Thoughts

Every market update is just one piece of the puzzle. If you're trying to work out what this means for you — whether you’re looking to buy, sell, refinance, or just want to plan ahead — it’s worth getting tailored advice based on your personal situation.

I spend a lot of time helping people seek clarity on their options and the next step in their financial journey. And I’d be happy to do the same for you.

You can reach out via the contact form, or book a meeting to chat through your goals and next steps.