Rents and prices.
Housing affordability in Melbourne has stabilised in the past year rather than deteriorated further — but "stabilised" means holding at the least affordable settings in the city's history. The median dwelling value is roughly nine times median household income, and the median advertised rent absorbs about 32% of the median renter household's pre-tax pay.
CoreLogic's Home Value Index shows Melbourne dwelling values essentially flat over the past twelve months, up just 0.3%. That sounds like relief until you compare it to Brisbane (+13%), Perth (+18%) and Adelaide (+11%), all of which have run past Melbourne on median dwelling value for the first time in modern history. Melbourne's underperformance is a combination of higher land-tax settings, an oversupplied inner-city apartment market, and slower population growth than the sunbelt capitals.
The median house price is around $945,000, the median unit around $610,000. Inner and inner-eastern suburbs remain expensive; the softer performance has been in outer growth corridors and the CBD apartment market.
Rental vacancy is at 1.2%, comfortably below the 3% "balanced market" benchmark. Advertised rents in inner Melbourne are up 6.8% year-on-year; outer suburbs are up around 5%. The stock of long-term rentals has thinned as some smaller investors exit the market, and short-stay accommodation continues to absorb dwellings in high-amenity precincts.
The Victorian Government's short-stay accommodation levy, in effect since January 2025 at 7.5% of platform revenue, has generated approximately $100m in its first year — earmarked for social housing — but has had a limited effect on the underlying short-stay stock so far.
Dwelling approvals in Victoria are running at their weakest level in a decade, driven by build-cost inflation, tighter apartment-defect regulation, and investor caution. The state's target under the National Housing Accord is 80,000 dwellings per year; the current run-rate is closer to 55,000.
The Big Housing Build (state) and Housing Australia Future Fund (federal) are together funding around 12,000 social and affordable dwellings in Victoria over five years. Community housing providers argue the number needs to double to make a demonstrable dent in the waiting list, which sits at 55,000+ households.
The Victorian Homebuyer Fund, the state's shared-equity scheme, was replaced from mid-2024 by the Commonwealth's Help to Buy program. First-home buyer activity is running well below the 2021 peak but has stabilised. The First Home Owner Grant of $10,000 remains available for new builds under $750,000 — a shrinking share of the market.
The August RBA meeting (a rate cut would lift borrowing capacity by ~5%), the delivery pipeline for the SRL East precinct and Fishermans Bend, and whether apartment approvals recover from their current trough. The affordability picture will improve materially only if construction runs faster than population growth for several consecutive years — a rare configuration in Melbourne's post-war history.