Property data suggests Melbourne is shaping up to be one of Australia’s most compelling investment property markets in 2026. After several years of steadying prices and a slower growth cycle than other capitals, experts say the city is now entering a period of renewed confidence and rising demand.
Forecasts including KPMG's Residential Property Outlook show Melbourne is positioned to see an almost 7% increase in house prices this year, making it one of the strongest markets for both new and experienced investors.
Australia’s most affordable capital city for investors
While data shows Sydney and Brisbane have surged ahead on price growth, Melbourne’s growth over the past two years has been modest and the city has maintained relative affordability with data from Cotality (formerly CoreLogic) showing the city’s median dwelling price is $826,132 – almost $100,000 below the national median. That stability is now a major selling point.
Melbourne did not experience an overheated market during the recent national upswing, which means its growth trajectory in 2026 is likely to be more sustainable and less volatile than investor hotspots that have already peaked. In fact, national forecasts put Melbourne’s 2026 house price growth at 6.8% while early predictions show a 7.3% growth in 2027.
“Melbourne’s comparatively lower price base relative to other capitals may provide room for further growth and help sustain momentum over the coming years,” the KPMG report says.
Rental demand has never been higher
Vacancy rates across Melbourne remain extremely tight with data from SQM Research showing them hovering around 1.4%, driven by population growth, sustained migration and low housing supply. This demand has created strong rental yields and increased competition among tenants, giving investors confidence in consistent returns.
Where Sydney faces affordability hurdles and Brisbane grapples with rapid rent increases, Melbourne is balancing price stability with ongoing demand. Infrastructure investment and population growth continue to fuel pressure on the rental market well into 2026.
Supply pressure will drive continued growth
In the 2024-25 financial year Victoria experienced the largest population increase of any Australian state with more than 87,000 overseas migrants according to the Australian Bureau of Statistics, and this trend is expected to remain strong.
Population growth puts pressure on housing availability, increasing both rental demand and buyer demand. With national housing supply expected to fall short of its target by more than 400,000 homes by 2029 according to a report by the Urban Development Institute of Australia, Melbourne is well positioned for sustained long‑term growth.
We make investing in Melbourne simple and affordable
With Melbourne’s market heating up, now is the ideal time for investors to secure a property while prices remain accessible. We offer a range of options designed to reduce complexity and maximise value for investors.
- Move-in ready homes: For the fastest, most hands‑off path to a brand new investment property, our completed homes offer unbeatable ease. These homes are move‑in ready, which means investors can attract tenants sooner and start generating returns without waiting for construction to finish.
House and land packages: Our house and land packages add convenience for investors who want a ready‑to‑go solution, but still want some control over their home’s design. In comparison to sourcing land and a builder separately, house and land packages offer clarity on costs, timelines and build outcomes to reduce uncertainty and speed up the investment journey.
Breakthrough collection: If you already have land, our Breakthrough collection caters to investors who want an affordable, streamlined pathway to building in Melbourne’s market. It provides modern, functional home designs at a price point that keeps the cost of entry low while taping into high demand among renters.
Why 2026 is the year to act
Melbourne is entering an ideal moment in its market cycle. Affordability remains strong, rental demand is growing, population growth is increasing and national forecasts show the city leading the country in price growth for 2026.
We’re here to help buyers take advantage of these conditions with flexible home options that align with their investment strategy. With steady growth ahead and strong demand building, 2026 is shaping up to be the year Melbourne reclaims its place as Australia’s best city for property investment.
To start your investment journey with us, reach out to one of our expert new home consultants in our completed homes or new build spaces.
