First published 14 Nov 2026, 5:00am
A new report from real estate research and analysis platform Hotspotting has ranked just four Melbourne suburbs as experiencing ‘hot’ markets. Picture: Jake Nowakowski.
The heat in Melbourne’s property market has plunged, with the share of suburbs attracting solid demand for homes dropping from 54 per cent a year ago to 20 per cent today.
A new report from property pundit Terry Ryder’s real estate research and analysis platform Hotspotting has ranked just four suburbs in Victoria’s capital as hot, meaning buyers are competing hard for stock and often paying above asking price.
This is a stark contrast to the 39 hot spots the city boasted back in September 2025, and follows five interest-rate rises.
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Houses in Albert Park, Gladstone Park and Clarinda, plus units, townhouses and apartments in Thornbury, made up the latest in-demand suburbs.
According to realestate.com.au, median house prices vary across these locations from $2,405,000 in Albert Park, $1,048,500 in Clarinda to Gladstone Park’s $811,250, while a typical Thornbury unit costs $612,750.
More than 100 other suburbs were labelled warm, indicating reasonable demand – which, when combined with the hot suburbs, amounted to about a fifth of metropolitan Melbourne.
But hundreds more areas were either “neutral” or “cool”, and about 40 – mostly on the Mornington Peninsula and on Melbourne’s outskirts – were deemed “cold”.
Melbourne’s median house values tumbled in September, dropping almost $2000 to reach $960,000. Picture: Aaron Francis/The Australian
Hotspotting managing director Tim Graham says suburbs ranked as cold can provide good opportunities for buyers wanting to snap up a second home, or planning a tree- or sea-change.
The report scored suburbs out of 100 based on criteria including stock inventory, homes sold above asking prices, vacancies, and quarterly price momentum.
It then applied temperature ratings to each area with hot for those scoring between 68 to 100, warm for 55 to 67, neutral for 40 to 54, cool for 25 to 39 and cold for 0 to 24.
Hotspotting managing director Tim Graham said the report aimed to help buyers figure out whether particular markets had reached their peak and were starting to cool, or if they were moving upwards.
But Mr Graham added that cold markets could offer prime opportunities with such areas having an abundance of stock on the market and not many listings selling above asking price.
“So examples like Noosa or the Mornington Peninsula, which are quite aspirational locations that in good times are very, very popular – right now they’ve got, in some cases, seven or eight months’ worth of inventory,” he said.
41 Reed St, Albert Park, is for sale with a $2.1m-$2.3m asking range. The suburb, with a $2,405,000 median house price, is one of four hot Melbourne areas, according to the report.
Cohen Handler’s Victorian business director and buyers’ agent Zac Jacobs said the interest rate rises, plus the uncertainty in the market prior to the Victorian election on November 28, made now a great time to buy because competition was much lower than a few months ago.
“The problem is there’s not a lot of stock out there, so buyers finding there’s not much stock are holding off buying themselves,” Mr Jacobs said.
He noted in September, a lot of vendors had been holding out hope their homes could achieve the higher sales prices of a few months prior.
But by October, they had realised the need to discount to meet the market, Mr Jacobs said.
4 Jindara Court, Gladstone Park, sold for $850,000 in 2025. The area has a $811,250 typical house value and was ranked as another of Melbourne’s hot suburbs.
Barry Plant Northcote and Preston’s Jessica Lozanovski said Thornbury units and townhouses were in-demand with first-home buyers and couples, especially homes requiring little to no work.
“We are finding that when buyers really love a property, they are still prepared to stretch their budget to secure it,” Ms Lozanovski said.
“It is definitely not uncommon for properties to sell above vendor expectations.”
One of her current campaigns for a two-bedroom unit at 6/39 Martin St, Thornbury, has attracted more than 60 buyers through the door and multiple offers in just two weeks.
Ms Lozanovski added Thornbury had been a highly desired suburb for years with properties close to High St, cafes, shops and public transport typically the most sought after.
The two-bedroom unit at 6/39 Martin St, Thornbury, listed with a $575,000-$625,000 range, attracted more than 60 buyers through the door in two weeks.
She noted that apartments throughout Thornbury continued to perform well, although demand could vary depending on the individual building, with factors such as owners corporation fees, amenities and overall building condition playing an important role.
“We continue to see the strongest appeal for the older 1970s to 1990s-style unit complexes along with townhouses, which offer a low-maintenance lifestyle, generally lower ongoing costs and are becoming increasingly sought after due to their limited availability,” Ms Lozanovski said.
“I also think that Thornbury is relatively affordable for someone wanting to enter the
inner northern market compared to some other neighbouring suburbs.”
Houses in Attwood, Oakleigh South, Sydenham, Belgrave and Fawkner were among those designated as experiencing a warm market, in the report.
Marshall White Port Phillip’s Nicholas Hoo said the number of properties for sale in Albert Park had fallen by about 50 per cent across the past 12 months, reflecting a wider trend across the city.
And while he hadn’t seen many houses sell significantly above reserve in recent months, most of them had performed reasonably well.
“We haven’t felt the dip that the rest of the market has felt,” Mr Hoo said.
Source: The Hotspotting National Thermometer Index spring edition 2026, realestate.com.au. Units covers apartments, units and townhouses. Median prices are for November 2025 – October 2026.
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