Melbourne’s property market has entered a rare buying window that may not last long, according to Jellis Craig, with the premium agency forecasting the Victorian capital is poised to enter its next growth phase as confidence gradually returns.
The outlook comes as the agency releases The Report FY27, its annual market outlook, which has been distributed to more than 100,000 households across Victoria in what is one of the largest print market reports produced by an Australian real estate brand.
Featuring insights from economists including Eliza Owen, Richard Temlett and Gerard Burg, alongside Jellis Craig CEO Andrew McCann, the report argues Melbourne’s combination of affordability, population growth and constrained housing supply has created the foundations for the city’s next property upswing.
“Our view is that Melbourne represents the best value it has for some time,” Mr McCann said.
“We don’t think this opportunity will be long-lived. As confidence returns, interest rates improve and inflation comes under control, buyers will look back on this period as the bottom of the cycle.”
Confidence, not affordability, is holding buyers back
Rather than a lack of value, Mr McCann said buyer hesitation is being driven by uncertainty.
“Markets are driven by confidence,” he said. “When buyers don’t have confidence in the environment, they tend not to act and everyone wants to pick the bottom of the market, but you can never truly do that.
“What you can do is buy the right property at the right time when affordability and opportunity align.”
The report highlights that Melbourne remains Australia’s second most affordable mainland capital, with median house prices sitting at 7.1 times median household income.
At the same time, tightening rental conditions continue to reinforce the city’s long-term investment fundamentals.
Rental vacancy rates have fallen to 1.2 per cent while rents have risen 4.8 per cent, reflecting ongoing demand that continues to outstrip available housing.
Migration to fuel the next wave of demand
Mr McCann expects Victoria’s strong migration pipeline to provide another major catalyst for market recovery.
He said new arrivals initially place pressure on the rental market before transitioning into home ownership.
“We see international migration driving rental growth, and then those tenants become buyers,” he said.
“History shows international buyers settle into communities and become homeowners quite quickly.”
However, he warned Australia’s housing shortage will remain difficult to solve without stronger policy support for private investment.
“We need private landlords in the market. We need faster planning approvals and we need developers building again,” he said. “Our view is governments should be doing more to incentivise investment rather than discouraging it.”
Sellers adjusting to the new market
While listings are expected to remain below last year’s spring levels, Mr McCann said vendors are becoming increasingly realistic about pricing, helping restore balance between buyers and sellers.
Jellis Craig expects listing volumes to be between five and 10 per cent lower than last spring, although days on market are improving and buyer confidence is gradually returning across Melbourne’s established suburbs.
“We’ve moved through that adjustment period,” he said.
“Owners now understand where today’s market sits and buyers are becoming more confident in making offers and bidding. There’s a much healthier balance than we saw earlier in the year.”
He added that today’s market is largely being driven by genuine housing needs rather than speculation.
“If you’re in the market today, you’re there for a reason,” he said.
“Families are upsizing, retirees are downsizing and people are making life decisions. There’s much less speculation than we’ve seen in previous cycles.”
A print strategy in a digital world
Alongside the market outlook, Jellis Craig is doubling down on physical publishing, producing 13 local editions and five Mandarin-language versions of the report while also launching a redesigned digital microsite complete with audio narration.
For Mr McCann, the investment is as much about building trust as marketing.
“In today’s world people consume information through podcasts, social media and email, but it’s also a much more cluttered environment,” he said.
“A printed publication sitting on a coffee table or in a café creates a different opportunity to educate people about the market and reinforces our position as an authority.”
He said customer research consistently shows the publication helps build confidence and encourages homeowners to engage with local agents.
“The feedback has been overwhelmingly positive around opening the door for conversations with our agents,” he said.