The Melbourne property market is expected to boom in 2026, with experts forecasting 6.6 per cent property value growth during the year.
Along with the anticipated property value growth, the factors driving Melbourne’s popularity as the Australian city to invest in during 2026 include:
- Median unit rents in Melbourne rising to $580 per week in the December 2025 quarter,
- Lesser property value growth rates in other capital cities,
- Sydney’s unaffordable median house price ($1.6M as at January 2026),
- Rental vacancy rates in Melbourne sitting at between 1.1% and 1.6%,
- Projected Melbourne median property prices of +$1.1M.
A range of suburbs are recommended for investment during 2026 for their anticipated value growth driven by CBD proximity, infrastructure growth, strong rental yields and public transport links.
Box Hill and Coburg are recommended by a number of experts. Boasting a healthy rental yield of 5.1% and 12 month property value growth of +10.8%, Coburg is also culturally diverse with a broad tenant base while enjoying proximity to the CBD (8kms north) and public transport access. Box Hill enjoys steady value growth due to its rental demand and good infrastructure including hospitals, schools and transport.
Cranbourne has good transport links covering the 43km commute to the CBD and is one of Melbourne’s fastest growing areas. Rental yields are strong at 4.1%.
Pakenham is a major growth area in Melbourne’s south east, experiencing strong urban development. Pakenham provides first home buyers and property investors with affordable new estates, 4.3% rental yields, new schools and easy city commuting via rail.
Melbourne’s inner and middle ring suburbs are primed for growth, with houses, units and low-rise apartments highly-sought after. Units in Yarraville, Seddon and Footscray provide affordable investing in locations featuring easy public transport, employment opportunities, and village-style local amenities.
Families and students seek units in the leafy suburbs of Bentleigh East, Mount Waverley and Clayton, praising the cultural diversity, convenient transport options, education and employment opportunities, and recreational facilities which combine to provide low vacancy rates and projected price rises.
And while off-the-plan high rise apartments are not on the experts’ recommendation list, low-rise apartment blocks in St Kilda, Elwood and Port Melbourne certainly are.
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