When people talk about property growth in Australia, the same cities tend to come up. Perth. Brisbane. Adelaide. And for good reason as they have delivered strong results over the past few years. But when it comes to the Melbourne property market in 2026, major institutions are now pointing to a different story. One that long-term property investors in Australia are worth paying close attention to.
First, some national context
Capital city dwelling prices are up 9.6% over the past twelve months, according to Cotality. Perth led with 22% annual growth, followed by Brisbane at 17.3% and Adelaide at 10.9%.
Those numbers get most of the headlines. But past performance does not tell you where to focus now. That requires looking at the underlying drivers, and that is where Melbourne becomes interesting.
What the forecasts are saying about the Melbourne property market in 2026
Earlier this year, KPMG forecast Melbourne house prices to rise 6.6% in 2026, naming it the best-performing capital city in the country. Domain’s modelling, also released earlier this year, points to Melbourne’s median house price reaching around $1.17 million by the end of 2026.
These are not small forecasts. And they are coming from well-regarded institutions that model population, supply, income and infrastructure together. It is worth understanding what is driving them.
Victoria attracts nearly 30% of all overseas migrants to Australia
Melbourne receives the highest intake of overseas migrants of any city in Australia. According to the ABS, net overseas migration added 306,000 people to Australia’s population in the year ending June 2025. Victoria consistently attracts close to 30% of that total.
The vast majority of new arrivals enter the rental market first. In a city where housing supply is already under pressure, that level of consistent demand is significant.
Melbourne is still materially more affordable than Sydney
For investors who have been watching Sydney’s median prices move beyond reach, Melbourne represents a market where the entry point is comparatively lower. That gap in affordability is one of the factors institutions point to in their current forecasts.
For families considering their first or next investment property, this is a practical consideration. The ability to enter a capital city market at a lower price point, with strong long-term demand drivers, is worth exploring with the right guidance.
Infrastructure investment at scale
The Victorian Government is averaging $17.9 billion per year in infrastructure investment through to 2028-29. That includes:
The Metro Tunnel. The $4.1 billion Sunshine Station upgrade. The West Gate Tunnel. The North East Link. Close to $1 billion in road upgrades.
Infrastructure investment at this scale has historically been associated with improved liveability, population growth and increased property demand over time. It changes how people move around a city, which suburbs become more accessible and where families choose to live.
That kind of structural change does not happen overnight. But it creates conditions that long-term investors pay close attention to.
What this means for long-term property investors in Australia
No market comes with a guarantee. But the picture forming around Melbourne — strong migration, a persistent supply shortage, improving affordability relative to Sydney and significant infrastructure investment — is the kind of combination that long-term investors look for.
The cities that have already run hard tend to get the most attention. The cities with the right conditions building underneath them tend to be where long-term investors focus their attention.
If you are thinking about your next investment property and want to understand how Melbourne fits into a structured, long-term approach, that is exactly what our consultations are designed to help you explore.
We help everyday Australian families cut through the noise and understand the market clearly, so they can make informed decisions based on their own circumstances.
Disclaimer: This article is for general information purposes only and does not constitute financial, investment, or tax advice. You should seek professional advice tailored to your individual circumstances before making any financial or investment decisions.
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