According to CoreLogic’s April home value index, Melbourne is the nation’s cheapest major capital city property market.
Melbourne’s median dwelling value was $786,158 at the end of April 2025, $119,605 (13% lower) than the national capital city median.
The improved affordability of Melbourne’s housing market comes after five years of relative stagnation.
As seen in the table below, Melbourne’s home prices have increased by only 10.5% over the last five years, the slowest growth rate among the capital cities.
For instance, dwelling prices in the combined capital cities have climbed by 35.7% over the last five years, while regional values have increased by 58.7%.
As a Melbourne resident with two teenage children, the relative stagnation of Melbourne home values makes me happy.
Although I am technically “less rich” because my house’s worth has not increased significantly in recent years, it means that my children may eventually be able to afford a home.
It also implies that I won’t have to aid them as much financially through the ‘Bank of Mum and Dad’.
Housing affordability is one area where the Victorian Labor Government has gotten things right.
Victoria has the highest share of first-time home purchasers out of Australia’s states, owing to the state government’s land tax increases, which have stifled investor interest.
The phenomenon reflects the historical inverse link between investor mortgage demand and first-time home buyer mortgage demand.
The absence of investor demand in Victoria has put downward pressure on home prices and given greater opportunities to first home buyers.
