News & Tips
Melbourne positioned for property investment outperformance
Media Release
Melbourne is re-emerging as one of Australia’s most attractive property investment opportunities, with a combination of affordability, strong population growth, and undersupply pointing to a period of possible sustained market outperformance, according to Oliver Hume Property Group.
Oliver Hume chief economist Matt Bell said that unlike Sydney, Brisbane, Adelaide and Perth, which have all rebounded to or surpassed their peak values, Melbourne remains below its December 2021 peak dwelling price, according to Cotality Home Value Index and Oliver Hume Research.
“At a median value of $780,000, Melbourne is still two years away from reaching previous highs, making it the only major capital city trading at a discount,” Mr Bell said.
“Historically, Melbourne property values sit at around 78% of Sydney’s median price. Today, that ratio is just 68%, underlining Melbourne’s relative affordability and potential for catch-up growth.”
Oliver Hume data for August showed that the Melbourne established market saw its seventh consecutive month of dwelling price growth, with annual house price growth now entrenched in positive territory. Auction clearance rates are holding solidly above 75%, implying continued increases in growth.
Mr Bell said that over the past 20 years, Melbourne has outperformed all other major capitals, recording average annual price growth of 6.3%. While recent performance has lagged, with just 0.6% average annual growth over the last three years, this underperformance positions Melbourne for a strong rebound, consistent with long-term trends.
Population Growth Driving Demand
Melbourne is set to reclaim its position as Australia’s largest city within the next decade. The city’s population is projected to grow by more than one million people between now and 2035, representing the fastest growth rate of any capital at 1.7% per annum. This demographic strength will continue to underpin housing demand.
The most recent estimated resident population data from the Australian Bureau of Statistics showed that for the first time since COVID, Victoria experienced a net inflow of interstate migration.
Housing Undersupply and Rental Market Strength
Julian Coppini, CEO of Oliver Hume Property Group, said Melbourne still faces the most significant housing undersupply of any Australian capital.
“With new construction failing to keep pace with demand, the imbalance is expected to drive price and rental growth,” Mr Coppini said.
“Melbourne’s rental market is recalibrating,” Mr Coppini said. “With yields now approaching 4%, investors are seeing a rare convergence of affordability, income potential, and long-term growth."
With undervaluation, strong demographic tailwinds, undersupply of housing, and improving rental returns, Melbourne stands out as a compelling investment destination. For investors seeking growth and stability, Australia’s second-largest city offers a rare window of opportunity before the market regains its historical trajectory.
Media enquiries to:
Ben Ready
- RGC Media
- ben@rgcmm.com.au
Mitchy Koper
- Mktng Oliver Hume
- m.koper@oliverhume.com.au
