There’s been a bit of talk lately about Melbourne “underperforming” compared to some of the other capitals.
And on paper, it’s easy to see why. Places like Perth and Brisbane have run pretty hard, while Melbourne has been a little more… controlled. But as is usually the case with property, what looks obvious at first glance rarely tells the full story.
Because what’s really been happening here isn’t underperformance — it’s a different set of fundamentals playing out. Over the past few years, Victoria has been building more new homes than any other large state, and that level of supply has quietly shaped how the Melbourne market has behaved.
In other words, Melbourne hasn’t been lagging — it’s just been playing a slightly more disciplined game.
So what does that actually look like in practice?
Across Melbourne, you can already see how that’s been playing out. Price growth hasn’t run as hard as some of the other capitals, particularly compared to markets like Perth and Brisbane, where limited supply and strong population growth have pushed values significantly higher over the same period.
That difference isn’t accidental.
Between 2020 and 2025, Victoria built more new homes than any other state, accounting for roughly a third of all dwelling completions nationally. That level of supply has had a real impact on how the market has behaved.
It doesn’t stop prices from growing — but it does change the way they move.
Instead of sharp, aggressive increases, Melbourne has seen a more measured pace. More homes coming online means more choice for buyers, less pressure to compete, and fewer situations where decisions are made purely on urgency.
From a buyer’s perspective, that’s actually a constructive environment — particularly for those looking at house-and-land packages or Melbourne’s growth corridors. More stock means a broader range of options, and importantly, prices that haven’t run as hard as other markets.
But it’s also worth keeping one eye on what comes next.
Melbourne’s population continues to grow at a solid pace, and over time, demand has a way of catching up. As that pressure builds, supply doesn’t always keep up at the same rate — and when that balance shifts, prices tend to follow.
So while the current conditions may feel a little more manageable, it’s also a reminder that these types of windows don’t tend to stay open indefinitely — Melbourne hasn’t been running behind, it’s just been running a little differently, and for the right buyers, that difference is often where the opportunity sits.
Have a great weekend.
Variable
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR.
1 Year Fixed
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR. At the end of the three year fixed period, the borrowers interest rate will revert to a standard variable rate for the life of the loan.
