Melbourne Property Market Update – August 2025.
- Thomas French
- 6 days ago
- 3 min read
Brought to you by Thomas French - Mitchell Torre Real Estate
Australia’s national home value index recorded its sixth consecutive month of growth in July, continuing the positive momentum that began in February after the first interest rate cut. Since May, home values have been rising at a steady monthly pace of 0.6 per cent, driven by a mix of low housing supply, easing interest rates, and renewed buyer confidence. While affordability pressures and economic uncertainty remain, demand is continuing to outweigh supply.
National Property Market Overview
Every capital city saw housing values increase in July, with Darwin leading the way at 2.2 per cent, followed by Perth at 0.9 per cent. Melbourne recorded more modest growth, but still added to its upward trend. Persistently low listing numbers remain a key factor, with national inventory levels 20 per cent below the five-year average. At the same time, annual sales volumes are nearly 2 per cent above average, keeping auction clearance rates above decade-long trends.
Over the past quarter, national dwelling values rose 1.8 per cent – the strongest quarterly growth since mid-2024. Houses rose by 1.9 per cent (adding around $16,700 to the median house value) while units increased by 1 per cent (about $9,700). The gap between the national median house and unit value is now at a record high of $223,000.
Regional and Rental Market Trends
Regional markets have lost their lead over the capitals for the first time in nine months, with city markets now outpacing regional growth. Rural areas in WA, QLD, and SA remain strong thanks to affordability and local economic strength.
Rental conditions remain tight, with vacancy rates at a historic low of 1.7 per cent. Rents rose 1.1 per cent nationally over the past quarter, placing more strain on tenants, particularly younger and lower-income households.
Melbourne Real Estate Snapshot – July 2025
Melbourne dwelling values rose 0.4 per cent in July, marking the sixth straight month of increases and a total 2.8 per cent gain since February’s turnaround – adding $22,570 to the median dwelling value. However, values are still around $28,000 below the March 2022 peak.
House values in Melbourne have risen 2.8 per cent this year, outperforming units at 1.2 per cent.
Vacancy rates are sitting at just 1.5 per cent, adding further upward pressure on rents.
For homeowners in Melbourne’s bayside suburbs such as Chelsea, Patterson Lakes, and surrounding areas, this consistent growth highlights ongoing buyer demand, especially in tightly held lifestyle locations.
Market Outlook for 2025
The outlook remains broadly positive, with modest growth expected for the remainder of 2025. Lower interest rates, improving consumer sentiment, and a shortage of housing supply are likely to underpin the market.
Key points influencing the months ahead:
Inflation is now within the RBA’s target range, increasing the likelihood of further interest rate cuts.
Housing supply is expected to remain constrained due to high construction costs, slow approvals, and labour shortages.
Affordability challenges and high household debt remain potential headwinds.
Despite these challenges, buyer demand in Melbourne’s bayside and surrounding suburbs is expected to remain strong, particularly through the spring selling season as more homes come to market.
Thinking of Selling or Curious About Your Home’s Value?
Whether you own a waterfront home in Patterson Lakes, a beachside property in Chelsea, or a family home in the surrounding suburbs, now could be the right time to understand where your property sits in today’s market.
Mitchell Torre Real Estate offers free, no-obligation property appraisals tailored to your suburb and home type. We combine local expertise with decades of market knowledge to help you make confident decisions.
📞 Call Thomas French – Executive Sales Consultant
M: 0415 558 101
Or book your free property appraisal online here: Free Property Appraisals | Mitchell Torre
Disclaimer: All statistics and data referenced are sourced from CoreLogic Australia. While every effort has been made to ensure accuracy, Mitchell Torre Real Estate accepts no responsibility for any loss or damage arising from the use of this information. Please conduct your own research before making any property-related decisions.
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