Victoria’s home values nose dive to begin 2025: PropTrack Home Price Index

Melbourne’s property market is sliding, with new PropTrack data revealing the areas losing the most value. Find out where is feeling the pain.

Perth is closing In on Melbourne’s property prices, now just $4,000 away from surpassing Melbourne’s median dwelling price. Picture: iStock

Melbourne’s property market has taken a more than $27,000 hit in the past year that has left Perth just $4,000 behind and potentially days away from overtaking the Victorian capital.

It would make Melbourne the country’s third least-expensive capital, with only Darwin and Hobart offering cheaper homes.

New data from PropTrack’s January Home Price Index shows Melbourne’s $779,000 typical dwelling value fell 0.30 per cent last month, and $27,334 (3.39 per cent) in the 12 months to January 31.

RELATED: Homebuilding giant’s $10m buyout to affect 1000s of Aussies

Country churches turn heads as buyers seek conversions

RCA: Iconic David Jones Bourke St store sells for $223m+

Meanwhile, Perth, Adelaide and Brisbane are booming, with annual growth at 15.38 per cent, 12.41 per cent, and 10.44 per cent.

Their rise and Canberra values holding up meant that the Victorian capital had fallen from the nation’s second most expensive behind Sydney, to fifth.

PropTrack economist Eleanor Creagh said with Perth’s median dwelling price now at $775,000 and Melbourne one of the weakest-performing capital cities since the pandemic, it was possible the WA capital would overtake it within the next month or two.

PropTrack economist Eleanor Creagh said that Melbourne has been the weakest-performing capital city since the pandemic.

Ms Creagh’s initial predictions hadn’t forecast this to occur until next May.

“Melbourne’s housing market has been relatively weak for much of the past four years,” Ms Creagh said.

“Since the pandemic it has been the weakest-performing capital city market, with prices rising only a little over 13 per cent in that period. In contrast, smaller capitals like Brisbane, Adelaide, and Perth have seen much stronger price growth – even Sydney, despite its affordability challenges, has recorded an almost 40 per cent increase in prices.”

It is important to note that dwelling values reflect an amalgamation of houses and units, with Melbourne’s median lower than many other capitals because it has significantly more units.

12 Yellowstone Close, Rowville sold last year for $1.51m. Buyers are flocking to Melbourne’s south east, where affordability and modern homes on large blocks are driving modest price growth despite the citywide downturn.

Suburbs like Rowville and Ferntree Gully are benefiting from Monash corridor overflow of buyers, with demand remaining strong for quality homes at lower prices

At present Melbourne’s median house value, which covers freestanding homes, is at $898,000 — but also recorded a substantial drop of $31,606 (3.4 per cent) in the past year.

Units dropped $20,145 (3.34 per cent) to reach $583,000.

Regional Victoria wasn’t spared either, with typical house values dropping $17,596 (2.28 per cent) to $597,000, while units were virtually flat after a $203 (0.47 per cent) decline to $430,000.

However, the PropTrack figures did show Melbourne’s south east’s median dwelling value rose a modest $3058 (0.39 per cent) to $781,000 over the past year.

Vicprop Ferntree Gully director Robert Spano said south east suburbs like Rowville and Lysterfield were benefiting from affordability-driven demand.

“The Rowville-Lysterfield area has performed well... and I believe this is largely due to buyer overflow from the Monash corridor,” Mr Spano said.

Melbourne’s west saw the steepest price drop of 3.36 per cent in the past year.

“The neighbouring Monash municipality has a relatively high price point, so buyers looking for affordability without compromising on quality are turning to the eastern corridor.”

Mr Spano said many buyers in the area were seeking modern homes on large blocks.

Belle Property head of Victoria Anthony Webb said an increase in investor sales had contributed to declines in many parts of Melbourne, particularly in the west.

“We’ve seen a significant number of landlords — or residential rental providers — selling off their properties over the past few months,” Mr Webb said.

104 Orchard Grove, Blackburn South – sold for $2.67m last year.

“Typically, these aren’t premium properties, and as a result, this increased supply of lower-quality stock is likely putting downward pressure on prices.”

Ms Creagh concurred that Melbourne’s struggles could be attributed to higher property taxes, increased stock levels, and weaker economic conditions.

“Victoria has also outperformed other states in housing supply over the past decade,” the economist said.

“New home completions per capita have been higher in Victoria than elsewhere, which has helped keep supply levels elevated.”

Cameron Way Woodards Blackburn said the outer east market is still performing strong.

Woodards Blackburn director Cameron Way said Melbourne’s outer east continued to attract buyers, despite its decline, due to its strong infrastructure and affordability relative to inner suburbs.

Mr Way said he believed the region’s quality schools, shopping precincts and established amenities would help ensure demand remained strong in 2025.

---

Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.

MORE: Supercar champ, ex-Total Tools boss punting Peninsula pad

Last of big banks pulls surprise rate cut move

Troye Sivan’s $1.7m score after move to Melbourne

[e-mail]

Originally published as Victoria’s home values nose dive to begin 2025: PropTrack Home Price Index