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As of September 2025, Melbourne's property market shows median house prices around $947,000 to $983,000, with units averaging $609,000 to $617,000. The average price per square meter varies dramatically from $620 in outer suburbs to over $3,900 in premium inner-city locations, making location the key factor in property pricing.
Melbourne's property landscape presents distinct pricing tiers from central to outer suburbs, with stamp duty adding significant costs and mortgage repayments averaging $3,859 monthly. Understanding these price variations helps buyers make informed decisions whether purchasing for residence or investment purposes.
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Melbourne property prices range from $470,000 in outer suburbs like Melton to $4.85 million in premium areas like Toorak, with the average price per square meter varying from $620 to $3,900 depending on location and property type.
Current market conditions show house prices stabilizing after recent declines, with forecasts suggesting 3% growth in 2025 and stronger recovery expected as interest rates decrease over the next few years.
| Location Type | House Median Price | Unit Median Price | Price per sqm Range |
|---|---|---|---|
| Central Melbourne/Inner Suburbs | $1.5m - $4.85m | $395,000 - $609,000 | $2,500 - $3,900 |
| Middle Ring Suburbs | $940,000 - $1.2m | $550,000 - $650,000 | $1,800 - $2,500 |
| Outer Suburbs | $470,000 - $657,000 | $390,000 - $480,000 | $620 - $1,500 |
| Premium Areas (Toorak, Brighton) | $2.7m - $4.85m | $800,000 - $1.5m | $3,000 - $3,900 |
| Budget Areas (Melton, Cranbourne) | $470,000 - $650,000 | $350,000 - $480,000 | $620 - $1,200 |
| Growth Suburbs (Werribee, Sunshine West) | $600,000 - $850,000 | $450,000 - $580,000 | $1,200 - $2,000 |
| Investment Hotspots (CBD, Carlton) | $1.2m - $2.5m | $395,000 - $700,000 | $2,200 - $3,500 |
What is the current average price per square metre in Melbourne?
The average price per square meter in Melbourne ranges from $620 to $3,900 as of September 2025, depending on location and property type.
For established properties, the historical resale average sits between $1,800 and $2,500 per square meter across Greater Melbourne. However, this figure varies dramatically based on whether you're looking at premium inner-city locations or outer suburban areas.
New construction costs provide another perspective, ranging from $620 to $3,900 per square meter for build costs. Inner-city properties command premium prices, with some areas reaching over $3,400 per square meter, while outer suburbs like Melton offer properties at around $620-$1,200 per square meter.
The Melbourne residential property market shows significant price variation, with central Melbourne properties averaging $2,500-$3,900 per square meter compared to outer suburbs at $620-$1,500 per square meter.
These figures represent current market conditions as the Melbourne property market stabilizes after recent price corrections due to interest rate increases.
How does the average price vary depending on the type of property, like apartments, townhouses, and houses?
| Property Type | Median Price (Greater Melbourne) | Typical Price Range |
|---|---|---|
| Houses | $947,000 - $983,000 | $470,000 - $4.85m |
| Units/Apartments | $609,000 - $617,000 | $350,000 - $1.5m |
| Townhouses | $600,000 - $650,000 | $450,000 - $1.2m |
| Premium Houses (Inner) | $2.7m - $4.85m | $1.5m - $4.85m |
| Budget Units (Outer) | $350,000 - $480,000 | $300,000 - $600,000 |
| CBD Apartments | $395,000 - $609,000 | $350,000 - $800,000 |
| Growth Area Houses | $600,000 - $850,000 | $470,000 - $1m |
What are the price differences between central Melbourne, inner suburbs, and outer suburbs?
Central Melbourne and inner suburbs command the highest prices in the Melbourne residential market, with significant drops as you move toward outer areas.
Central Melbourne and inner suburbs like Carlton North and Kingsville show median house prices reaching $1.5 million to $3 million in prime areas. A typical inner-city 3-bedroom home on 276 square meters costs around $950,000, translating to $3,440 per square meter.
Middle-ring suburbs located about 21 kilometers from the city center, such as Avondale Heights, offer better value with 3-bedroom houses on 711 square meter blocks selling for approximately $940,000, or $1,322 per square meter. These areas provide a balance between accessibility and affordability.
Outer suburbs like Melton, Craigieburn, and Cranbourne present the most affordable options with median house prices ranging from $470,000 to $657,725. Units in these areas can be purchased for as low as $390,000 to $480,000.
The price differential between central and outer Melbourne can be as much as 10 times, making location the most significant factor in Melbourne property pricing.
Can you give example purchase prices for typical properties in different parts of Melbourne?
Specific property examples across Melbourne demonstrate the wide price range based on location and property type.
In Toorak, Melbourne's most expensive suburb, median houses with 4-5 bedrooms on large blocks sell for $4.85 million. Brighton and Kew follow with median house prices between $3.1 million and $3.68 million for similar properties.
Carlton North represents inner-city pricing with 2-bedroom houses selling between $980,000 and $1.04 million. Moving to middle-ring suburbs, Avondale Heights offers 3-bedroom houses for around $940,000.
Outer suburban areas provide entry-level pricing, with Melton and Cranbourne offering median houses between $470,000 and $657,725. Melbourne CBD apartments present another option, with 2-bedroom units ranging from $395,000 to $609,000.
Budget-conscious buyers can find 2-bedroom units in areas like Albion for approximately $350,000, demonstrating Melbourne's diverse price points across different market segments.
What are the most expensive neighbourhoods right now, the up-and-coming areas, and the more budget-friendly ones?
Melbourne's property market segments into distinct tiers based on prestige, growth potential, and affordability.
The most expensive neighborhoods include Toorak, Brighton, Kew, Kooyong, Canterbury, Balwyn, Camberwell, and East Melbourne, where median house prices range from $2.7 million to $4.85 million. These areas maintain their premium status due to established prestige, excellent schools, and proximity to the city.
Up-and-coming growth areas showing strong investment potential include Werribee, Sunshine West, Coburg North, Cranbourne, Footscray, and Donnybrook. These suburbs benefit from infrastructure development, improving transport links, and gentrification trends that drive property value appreciation.
Budget-friendly suburbs offering affordable entry points include Melton, Craigieburn, Cranbourne, Norlane, Albion, Herne Hill, Dallas, Officer, Kurunjang, and Corio. House prices in these areas typically range from $470,000 to $650,000, with units available from $350,000.
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These classifications help buyers identify opportunities whether seeking luxury, growth potential, or affordability in the Melbourne residential property market.
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What is the total purchase cost once you include fees, taxes, and stamp duty?
Total purchase costs in Melbourne extend significantly beyond the property price due to stamp duty and associated fees.
Victorian stamp duty represents the largest additional cost at 5.5% for properties between $960,000 and $2,000,000, with concessional rates available for first-home buyers on properties under $750,000. A typical $983,000 house incurs approximately $41,770 in stamp duty for owner-occupiers under standard rates.
Additional costs include conveyancing and legal fees ranging from $2,000 to $3,000, property inspection fees starting at $500, mortgage establishment fees between $300 and $1,000, plus insurance and moving expenses. These combined costs typically add $2,500 to $5,000 to the purchase.
For a $983,000 house purchase, total upfront costs including stamp duty and fees range from $985,500 to $1,030,000, representing an additional 2.5% to 4.8% above the property price. This makes understanding total acquisition costs crucial for budget planning in the Melbourne property market.
First-home buyers may qualify for stamp duty concessions that can significantly reduce these costs for properties under the eligibility thresholds.
How much would monthly mortgage payments look like for an average property at today's rates?
Monthly mortgage payments in Melbourne reflect current interest rate conditions and median property prices.
The average monthly mortgage repayment for Victorian properties stands at $3,859 based on a $627,744 loan at 6.23% interest over 30 years as of August 2025. This figure represents typical borrowing conditions across the state.
For a median Melbourne house priced at $983,000 with a 20% deposit, the loan amount would be $786,400. At current interest rates around 6.23%, monthly repayments would approximate $4,800 over a 30-year term.
Interest rate variations significantly impact monthly payments, with each 0.25% change affecting monthly costs by approximately $100-$150 on a typical Melbourne mortgage. Current market expectations suggest interest rates may decrease over the next 12-24 months, potentially reducing monthly payment burdens.
These payment levels require household incomes of approximately $150,000-$180,000 annually to meet standard lending criteria, highlighting affordability challenges in the Melbourne residential market.
If someone is buying to live in the property, what are the smartest choices today?
Owner-occupiers should focus on inner and middle-ring suburbs offering lifestyle benefits and growth potential.
Recommended areas include Coburg North, Sunshine West, Werribee, Cranbourne, and Footscray, which provide good schools, transport connections, and lifestyle amenities while maintaining relative affordability. These suburbs offer established infrastructure with room for capital growth.
Property types suitable for owner-occupiers include established villa units and townhouses in family-friendly areas, which often provide better value than houses while maintaining lifestyle appeal. These properties typically offer lower maintenance requirements and better security features.
Buying below replacement cost presents excellent opportunities, particularly for established properties in boutique developments. Look for homes with growth catalysts such as nearby infrastructure projects, new schools, or transport improvements that enhance long-term value.
Avoid high-rise apartments in oversupplied areas and focus on properties with strong owner-occupier appeal, as these maintain better resale value and provide superior lifestyle outcomes for residents in the Melbourne residential market.
If someone wants to rent it out, what are the best options for short-term and long-term rentals?
Rental investment strategies in Melbourne vary significantly between long-term and short-term approaches.
For long-term rental investments, growth suburbs offer the best combination of yield and capital appreciation. Werribee provides houses yielding 3.9% and units yielding 5.2%, while Sunshine West, Cranbourne (houses 4.1%, units 4.8%), and Melton (houses 4.5%) present strong rental demand with growth potential.
High-yield unit investments concentrate in inner Melbourne, with Melbourne CBD apartments yielding 8.6%, Carlton units at 7.5%, and Southbank properties achieving 7.1%. These areas benefit from strong rental demand from professionals and students.
Short-term rental opportunities focus on inner-city apartments and units in Melbourne CBD, Carlton, Southbank, and Docklands. These locations attract tourists and business travelers, generating higher nightly rates but requiring more active management.
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Long-term investment success depends on choosing areas with population growth, infrastructure development, and sustained rental demand, while short-term rentals require properties in prime locations with strong tourism and business activity.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
If the goal is to buy and resell later, what areas or property types look most promising?
Capital growth opportunities in Melbourne focus on gentrifying suburbs and properties with strong owner-occupier appeal.
Inner suburbs undergoing gentrification present excellent resale prospects, particularly Coburg North, Sunshine West, and Footscray, where infrastructure improvements and changing demographics drive value appreciation. These areas benefit from proximity to the city while maintaining affordability.
Areas with large infrastructure projects offer significant upside potential, as transport improvements and urban development create value uplift. Outer suburbs with expanding populations also present opportunities, though require longer investment timeframes for optimal returns.
Property types with strong resale potential include boutique villa units and townhouses that appeal to owner-occupiers. These properties typically show better resilience during market downturns and stronger recovery potential as interest rates decrease.
Avoid high-rise apartments in oversupplied markets, as these show slower capital growth and higher vacancy risks. Focus on properties with unique characteristics, established locations, and strong fundamentals that attract both investors and owner-occupiers in the Melbourne residential market.
How have prices changed compared to one year ago and five years ago?
| Year | Median Price (Greater Melbourne) | Year-on-Year Change |
|---|---|---|
| August 2020 | $735,000 | — |
| August 2021 | $785,000 | +6.8% |
| August 2022 | $885,000 | +12.7% |
| August 2023 | $855,000 | -3.4% |
| August 2024 | $852,000 | -0.3% |
| August 2025 | $845,000 | -0.8% |
What is the forecast for prices over the next one year, five years, and ten years, and how does Melbourne compare with other major cities?
Melbourne property market forecasts indicate gradual recovery following recent price stabilization.
For 2025, approximately 3% growth is expected as the market adjusts to stabilized interest rates and renewed buyer confidence. This modest growth reflects cautious optimism in the Melbourne residential market.
The 2026-2027 period shows stronger growth potential with forecasts suggesting 5% annual growth as interest rate cuts take effect and immigration increases housing demand. This recovery phase benefits from pent-up demand and improved affordability conditions.
Long-term projections over 10 years expect Melbourne property prices to recover and grow steadily, underpinned by population growth, infrastructure development, and economic expansion. The fundamentals supporting Melbourne's growth remain strong despite current market conditions.
Compared to other major Australian cities, Sydney maintains higher property prices with median houses at $1.56 million, while Brisbane, Adelaide, and Perth experience stronger percentage growth but from lower price bases. Melbourne's position offers a balance between established market maturity and growth potential.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Melbourne's property market in September 2025 presents diverse opportunities across different price points and investment strategies.
Understanding the significant price variations from $620 per square meter in outer suburbs to $3,900 in premium areas helps buyers make informed decisions whether purchasing for residence or investment purposes.
Sources
- Real Estate - How Much Does It Cost to Build a House
- Domain - Housing Affordability Price Per Square Metre
- Real Estate - Melbourne House Prices Median Milestone
- Property Buyer - Melbourne Property Prices by Suburb 2025
- Your Mortgage - Median House Prices Around Australia
- Metropole - Most Expensive Suburbs in Melbourne
- Savings - Rental Yield Victoria
- Money - Victoria Stamp Duty Calculator
- Canstar - Average Home Loan Australia
- Global Property Guide - Australia Price History