The sweet smell of jasmine and the sunny blue skies bringing in balmy weather mean only one thing – spring has finally arrived! There is no better time in Melbourne than the heights of spring, and with it comes one of the busiest periods for real estate, with both buyers and sellers looking to capitalise.
And the sentiment has definitely shifted in Melbourne. September saw property prices surge 0.5% for the month, resulting in an annual increase of 3.4% and a median property price of $839,000. It has been a slow and steady rise for Melbourne property in 2025 as values recover following the post-COVID downturn. Will spring continue this upward trend?
Clearance Rates Continue to Soar
The last few months have seen clearance rates in Melbourne climb to near-record levels. According to Domain, September alone saw weekly clearance rates of 71%, 69%, 71%, and 71%. The corresponding weeks in September 2024 recorded rates of 61%, 60%, 57%, and 56% respectively. The number of reported auctions was also up, with 3,364 in September 2025 compared to 3,218 the previous year.
There is no doubt that the Melbourne property market has turned a corner. Domain is predicting that Melbourne house prices will rise 6% during this financial year, with units/apartment to likely increase by 5%. This would equate to a Melbourne median house price of $1.11 million by the end of June 2026, while units are forecast to reach a median of just over $584,000.
“When you think about the level of growth that we’ve seen in recent years, it has been Adelaide, Brisbane and Perth really charging ahead, but we are expecting those affordable markets to rapidly slow down,’ said Dr Nicola Powell, Domain’s chief of economics and research. “The dynamic is going to revert back to what we normally see: our big two capital cities [Sydney and Melbourne] will be leading growth.”
Suburbs Likely to Surge This Spring Selling Season
A select few suburbs across Melbourne are showing elite clearance rates heading into middle of the thriving spring season.
According to PropTrack, Australia’s leading source of property insights and statistics, Blackburn, Mulgrave, and Rowville produced clearance rates above 90% in August. Thomastown, Bundoora, and Epping also posted sky-high rates. Each of these suburbs exceeded their clearance rate numbers from 2024. Rowville surged to the front of the pack, almost doubling its rate to 91% in August 2025, compared to 52% in the same month last year.
Thomastown set the bar with a 100% clearance rate in August from 22 auctions. “Even though Thomastown has faced challenges to its reputation in recent years, it still offers a vibrant community and great opportunities,” said Jacob Caine, Real Estate Institute of Victoria (REIV) interim chief executive, in the Herald Sun. “You can enjoy cuisines from across the world, and it still offers an attractive and affordable entry point to the market.”
Interest Rates Trending in the Right Direction
Despite the Reserve Bank of Australia (RBA) keeping rates on hold at their last board meeting on September 30, interest rates are trending positively for buyers who have been patiently waiting to secure their dream home.
The RBA cut the cash rate by another 0.25% at their August meeting to 3.60%, the lowest level since April 2023. Although the RBA held off on further cuts in September due to higher-than-expected inflation numbers, pundits are forecasting another rate reduction at the next November meeting, the second-to-last RBA board meeting of 2025.
Three of the big four banks have predicted a rate cut in November, with NAB the only bank expecting the next reduction in 2026. If another cut occurs (likely bringing the cash rate to 3.35%), the Melbourne property market is expected to perform very strongly to finish off the year, and continue to be buoyant into early 2026.
Three-Bedroom City Apartments a Surprise Hit
While Melbourne median prices have steadily increased in 2025 after a tumultuous few years, family-friendly three-bedroom CBD apartments are exceeding expectations according to an article in the Herald Sun in September.
These apartments have increased in price by $155,000 over the past 12 months – an eye-catching 14.1% rise. To put this into perspective, Melbourne’s yearly unit price growth as of September 2025 stood at 3.7%.
The trend is not limited to the city. Three-bedroom apartments in Box Hill have risen by $50,000 (5.7%), while Docklands three-bedroom residences are up $35,000 (3%). These figures suggest that buyers, including families, are increasingly considering more affordable three-bedroom apartments over traditional three-bedroom homes.
It’s that time of year again. The days get longer, the streets get twinklier, and inflatable Santas start popping up in yards around Melbourne.
As we close out 2025, it’s clear to me that Melbourne’s property market has not only rebounded but is gearing up for a genuine awakening in 2026.
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