Melbourne housing market: Property listing surge and coastal sell-offs creating a buyer’s market

With a surge in property listings across Victoria, buyers are spoiled for choice — find out where experts suggest to look to nab a home, and why these opportunities probably won’t last.

2025 Victorian property market: Why now is the ideal time for buyers to act before interest rates drop and competition returns.

Victorian homebuyers are getting their best start to a new year in decades, with the number of homes for sale in some areas are at more than three times higher than normal levels.

Thousands of investors looking to sell off rental apartments in Melbourne’s CBD over the past year has left the number of homes for sale in the heart of the city at 357 per cent higher than normal in the past five years.

Regional hotspots are also experiencing a massive surplus in choices for buyers, with the central Victorian town of Rochester that was hit by flooding in 2022 now offering buyers three times the normal number of homes for sale.

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PropTrack senior economist Paul Ryan said that in addition to natural disasters, the rise in listings reflected broader market conditions and government policies impacting property investors across the state.

“After years of tight supply, we’re now seeing the market open up, which is good news for those looking to purchase,” Mr Ryan said.

“Over the past year, Greater Melbourne has seen about 5000 more investor-owned properties sold than expected.

1211/233 Collins St, Melbourne – Sold for $480,000. Inner-city Melbourne now offers investors and first-home buyers unprecedented choice and value in the property market.

Melbourne CBD apartment listings soared 457 per cent above the five-year average in December, presenting an unprecedented opportunity for homebuyers and investors.

“Many investors are seizing the opportunity to re-enter the market or upgrade their portfolio, especially given Melbourne’s relative affordability compared to Sydney.”

Buyer’s advocate Cate Bakos said the Melbourne CBD was attracting significant investor interest.

“Melbourne’s unit and apartment market offers the best bang for your buck compared to any other capital city,” she said.

Buyer's agent Cate Bakos said an abundance of listings means buyers can be pickier, holding out for properties that tick every box.

66 Twain Way, Fraser Rise – Sold for $585,000 – Holiday homes in Port Fairy are hitting the market in droves due to rising interest rates and the new short-stay levy.

“The price gap between Melbourne and Sydney is the widest it’s been since the early 1990s.

“So buyers from Sydney are leveraging their equity to snap up properties here, and they see a lot of upside.”

Ms Bakos said the abundance of listings was also giving buyers the confidence to be pickier.

Inside 13 Elizabeth St, Port Fairy, which sold for $580,000.

3 Ruislip Ave, Strathtulloh – Sold for $590,000. Melbourne growth corridors have seen a rise in listings.

“Buyers are inspecting more properties and holding out for homes that tick every box.

“For those who’ve been waiting for the right property, this is a moment in the market that is few and far between.”

Holiday destinations like Port Fairy, Anglesea and Cape Paterson also have listings at about triple their normal level, as many holiday-home owners sell due to rising interest rates and new taxes.

Whitefox Bayside director Lana Samuels said rising taxes and financial strain are forcing families to reconsider the value of their holiday homes’.

9 Wheeler Rd, Cape Paterson – Sold for $1.67m. Cape Paterson is transforming from a holiday retreat to a full-time living destination for city escapees.

Whitefox Bayside director Lana Samuels said many sellers were reconsidering the value of a second home as the state’s short-stay accommodation levy hit holiday-home owners hard in coastal areas.

“For families under financial pressure, selling a holiday home is often the first move before touching their primary residence or other essentials like school fees,” Ms Samuels said.

25 River Redgum Boulevard, Donnybrook – Sold for $710,000. Donnybrook’s growth corridor is seeing an increase in new developments.

Donnybrook gives first-home buyers a chance to enter Melbourne’s property market with high listings, though competition remains high.

“With the added burden of taxes, it no longer makes financial sense for many to hold onto these properties.”

Ms Samuels added that the rise of Covid had changed the demographics of many coastal areas, as working from home allowed more formerly city-centric people to move to these regions full time.

“Buyers are recognising the lifestyle and value – they’re selling up in Melbourne and making coastal properties their forever home,” she said.

Ray White Rochester principal Stuart Wilson said Rochester offers unbeatable value, with four-bedroom homes under $500,000 and rental yields close to 10 per cent.

In regional areas, towns like Rochester, recovering from the devastating 2022 floods are attracting buyers looking for affordability and strong rental returns.

Ray White Rochester principal Stuart Wilson said the opportunities in Rochester were endless.

“You can pick up a four-bedroom, two-bathroom home on a generous block for under $500,000,” Mr Wilson said.

2 Leahy Court, Rochester – Sold for $460,000.

Rochester, recovering from devastating floods in 2022, now offers some of the state’s most affordable homes.

“And rental yields are close to 10 per cent — it’s hard to beat.

“And you’re in a beautiful country town with city conveniences just down the road. Echuca, Bendigo, and even Melbourne are all within easy reach.”

Melbourne’s outer growth corridors, such as Beveridge and Donnybrook, are also seeing a rise in listings thanks to an influx of new developments.

15 Fortitude Ave, Beveridge – Sold for $385,000.

The rise in listings in Beveridge reflects an influx of new builds, offering affordability but experts say requires careful buyer research.

But while these areas offer affordability for first-home buyers, Ms Bakos warned of potential risks.

“In growth corridors, the sheer volume of new builds can reduce the appeal of existing homes,” she said.

3 Ruislip Ave, Strathtulloh – Sold for $590,000. Strathtulloh sees a surge in listings as Melbourne’s outer suburbs continue to expand.

Outer Melbourne suburb Strathtulloh became a hotspot for affordable new builds.

“Buyers in these areas need to think carefully about the long-term potential of their investment.

“These areas can offer great value, but you need to do your homework.”

But buyers might not have long to drive a hard bargain.

PropTrack economist Paul Ryan said Greater Melbourne has seen 5,000 more investor-owned properties sold than expected, creating a rare opportunity for buyers.

1 Ninth Ave, Anglesea – Sold for $1.55m – Listings in Anglesea have jumped over 200 per cent, as financial strain pushes many holiday-home owners to sell.

Mr Ryan said 2025 could bring a resurgence of demand as interest rates fell, making now the ideal time to act.

“Now is the time to act, we’re at a tipping point – if you wait for rates to drop, you could face more competition and rising prices, the conditions we’re seeing now are a sweet spot for buyers.”

3 Ashton Ave, Winter Valley – Sold for $520,000.

Victorian property prices remain one of the most affordable among major Australian cities.

Victorian suburbs with the most elevated choice for buyers

Rank	Suburb	Total increase in listings relative to 5yr Dec average
1	Melbourne	357%
2	Rochester	116%
3	Beveridge	105%
4	Port Fairy	104%
5	Strathtulloh	98%
6	Donnybrook	92%
7	Fraser Rise	92%
8	Anglesea	87%
9	Cape Paterson	83%
10	Winter Valley	81%

Figures denote percentage increase in total listings compared to five-year average

Source: PropTrack

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Originally published as Melbourne housing market: Property listing surge and coastal sell-offs creating a buyer’s market