Is Melbourne Entering a Buyer’s or Seller’s Market?

The reality is a two-speed market: affordable segments remain competitive, while higher-end and overpriced stock is softening.

In the affordable range, demand remains exceptionally strong, driven by both first-home buyers and investors. According to the Investor Report 2026 jointly published by PropTrack and Westpac, nearly half of investor enquiries are concentrated below the $700,000 price point, while first-home buyers also show strong interest in this segment, with enquiries reaching as high as 45%, despite less than a third of available stock sitting within this range. 

This imbalance has created a highly competitive environment, where well-priced properties continue to attract strong interest and sell relatively quickly. As a result, the affordable segment continues to demonstrate characteristics of a seller’s market, underpinned by structural undersupply and sustained population growth.

This is particularly evident in product types such as apartments and semi-detached homes, which remain highly sought after by investors due to their relative affordability, rental appeal, and accessibility within this price bracket.

By contrast, the $2M–$3M segment presents a very different dynamic. Demand in this bracket is more discretionary and increasingly sensitive to broader economic conditions, including interest rates and overall market sentiment. At the same time, supply has become more abundant, with more listings entering the market and properties taking longer to transact. Buyers in this segment are no longer under pressure to act quickly and are instead taking a more considered approach, often negotiating on price and terms. This shift has led to softer price performance and reduced competition, indicating that this part of the market is gradually moving in favour of buyers. Melbourne’s premium property market is facing a significant downturn, with affluent buyers on strike, leading to price drops of 20-25% in prestigious suburbs like Toorak, Kew, and Malvern, according to The Australian. 

Together, these two segments highlight a fundamental reality: Melbourne is no longer operating as a single, unified market, but rather as a layered and increasingly selective landscape. It is evolving into a multi-speed environment where outcomes are no longer driven by broad market momentum, but by precision, defined by price positioning, product relevance, and alignment with underlying buyer demand. 

In this context, success is no longer guaranteed by participation alone, but by the strategic alignment of product, positioning, and market timing supported by a clear understanding of where demand truly lies.

Disclaimer:

The information provided in this article is for general informational purposes only and reflects opinions based on current market data and publicly available sources. It does not constitute financial, legal, or investment advice. Readers should seek independent professional advice tailored to their individual circumstances before making any property or investment decisions.