Melbourne is tipped to exit the million-dollar club, with the median house price expected to fall below the $1 million threshold by the year’s end, marking its lowest level since March 2021.
The Domain House Price Report for the September quarter reveals the city’s median house price is just $14,000 shy of slipping back into six-figure territory. The median currently sits at $1,014,335, having slipped 3.3 per cent, or $34,192.
For Melbourne to dip below the benchmark, it would need a quarterly decline of just 1.41 per cent, which is almost certain, says Domain chief of research and economics Dr Nicola Powell.
“Even if this pace of decline starts to ease, it’s almost a certainty that a 1.4 per cent drop is going to be realised over the next quarter,” she says. “But what we’re actually seeing in Melbourne is the pace of decline is gathering momentum.”
Melbourne has weathered three consecutive quarters of house price falls, starting with a 0.6 per cent loss in March, then a 3.1 per cent drop in June, followed by a 3.3 per cent decline in September.
Melbourne first cracked the $1 million median in June 2021, then strong pandemic-era growth pushed the median to $1,084,968 in December 2021 before it declined .
After four years of fluctuating gains and losses, Melbourne finally made a full recovery in December 2025, when the median hit its peak at $1,087,171 – but the recovery was short-lived, with sustained losses since.
Powell says the last five years and population dynamics have shaped Melbourne’s sluggish property market.
“O ne of the biggest shifts has been population dynamics – the period of COVID where we saw population exodus from Melbourne into the regions and into other states and territories,” she says.
“That impact on population growth being much weaker than other states and territories, as well as a higher level of supply overall, means that Melbourne just hasn’t seen the growth.
“It is the only capital city where house prices have declined over the past five years – they’re down 1.9 per cent over the period, while all of our other capital cities have seen some level of growth.”
Once Australia’s second most expensive property market, Melbourne is now one of the nation’s most affordable capital cities for houses, followed by Hobart ($790,155) and Darwin ($752,478).
“If it gets below $1 million , it’s going to be only one of three capital cities below that , and the other two capital cities – Hobart and Darwin – are much smaller cities,” Powell says.
Tipping below that line will be a psychological milestone for buyers, says Melbourne buyer’s advocate Emily Wallace of Wallace Advocates .
“It’s a real line-in-the-sand price point for a lot of people, and so if they can be in six-figure territory rather than seven-figure territory, I think there’s extreme value there that people will recognise, but I do think it will be short-lived,” she says.
108 Mount Alexander Road, Travancore VIC 3032
“W hen you look at all the positive characteristics that Melbourne has to offer, I just can’t see how it will be below the $1 million mark for an extended period of time. But for those who are in the market when it is, I think it’ll be extremely good buying.”
Wallace says waiting for the market to hit its floor usually goes hand-in-hand with property prices starting to climb again, and adds that today’s conditions are delivering good value for buyers.
“You don’t want to be buying and chasing the market upwards,” she says. “Y ou want to be buying when you think about a bell curve in a downward bell shape. You want to be buying pretty close to the bottom before it flicks back up, because that’s when everyone runs to the market, and then you get these big sales, and then we’ll see that median shift.
“I would argue that now or roundabout now is probably a pretty good time to buy because I just don’t see how the median is going to sit below $1 million for a long time. It might be a handful of months.”
42 Edward Street, Brunswick VIC 3056
The last time Melbourne’s median was below $1 million was March 2021, and Wallace can already see the correlation between property prices then and now.
“When I’ve been doing pricing reports to my clients on what a property is worth, sometimes the results are from late 2020 and early 2021 and are actually relevant to today, and that’s where the trajectory looks like it’s headed back where the prices were back in March 2021,” Wallace says.
“As a buyer’s advocate, we’re bracing for when people start to cotton on to the value [of Melbourne] and for things to start feeling like the 2021 peak market again, so I would say it’s a great opportunity for buyers.”
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