{"id":656976,"date":"2026-05-08T04:36:25","date_gmt":"2026-05-08T04:36:25","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/656976\/"},"modified":"2026-05-08T04:36:25","modified_gmt":"2026-05-08T04:36:25","slug":"is-melbourne-housing-a-bargain-or-fools-gold","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/656976\/","title":{"rendered":"Is Melbourne housing a ‘bargain’ or ‘fool’s gold’?"},"content":{"rendered":"

Stephen Johnson from The Nightly argues<\/a> that Melbourne housing is at \u201cbargain prices\u201d. Why? Because Melbourne is the only major Australian city where house prices have barely risen since 2021 \u2014 up just 5.8% \u2014 leaving many suburbs still at \u201cpre\u2011COVID\u201d price levels.<\/p>\n

This contrasts with Brisbane, Perth, and Adelaide, where values have almost doubled over the same period.<\/p>\n

\"Major<\/p>\n

Johnson notes that Melbourne home prices peaked in March 2022, just before the RBA\u2019s rapid tightening cycle. The city\u2019s lockdowns, population outflows, and slower recovery have kept demand softer than in other capitals.<\/p>\n

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Investors \u2014 especially those with holiday homes on the Mornington Peninsula \u2014 are selling due to\u00a0Victoria\u2019s new annual land tax (flat $975 on land values as low as $50k, until 2033) and fears of federal government CGT discount changes and negative gearing reforms in the upcoming Budget.<\/p>\n

This uncertainty has triggered panic selling in prestige postcodes like Sorrento and Portsea.<\/p>\n

As a result,\u00a0Melbourne is the only capital where wage growth has outpaced property price growth since COVID, with the median price rising far less than the 19.8% increase in full\u2011time earnings.<\/p>\n

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This makes Melbourne uniquely affordable relative to incomes.<\/p>\n

The following chart, which tracks Melbourne\u2019s median house price against the other capital cities since the early 1970s, shows that relative affordability is tracking at its most favourable level since the early-1980s:<\/p>\n

\"Melbourne<\/p>\n

Based on this chart alone, it would appear that Melbourne housing is indeed a \u201cbargain\u201d.<\/p>\n

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That said, Melbourne dwelling values continue to decline at the equal fastest pace in the nation, according to Cotality:<\/p>\n

\"Cotality<\/p>\n

The latest state forecasts from Westpac also show that Victorian household consumption per capita is expected to decline over the next few years:<\/p>\n

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\"Household<\/p>\n

Victoria\u2019s per capita gross state product is also forecast to decline:<\/p>\n

\"Victorian<\/p>\n

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Sadly, Victoria has become an economic sinkhole. It is overregulated, overtaxed, drowning in debt, and has no competitive advantages over the other main states.<\/p>\n

Reflecting this outlook, Cotality\u2019s Tim Lawless told the Nightly that Melbourne\u2019s housing market is \u201cmore sensitive and fragile\u201d due to weaker economic fundamentals.<\/p>\n

Thus, while Melbourne housing is a relative \u201cbargain\u201d, its price outlook remains poor due to the city\u2019s poor economic fundamentals.<\/p>\n

Advertisement<\/p>\n","protected":false},"excerpt":{"rendered":"Stephen Johnson from The Nightly argues that Melbourne housing is at \u201cbargain prices\u201d. Why? Because Melbourne is the…\n","protected":false},"author":2,"featured_media":656977,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-656976","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/656976","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=656976"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/656976\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/656977"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=656976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=656976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=656976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}