Victoria Property Market: Melbourne Set to Lead 2026 Growth
Victoria's property market is positioning for a strong recovery, with forecasters tipping Melbourne to lead national price growth in 2026. After several years of underperformance, the state capital is showing renewed momentum.
Melbourne's Recovery Story
Melbourne has been the most affordable of Australia's two largest cities, and that relative value is now attracting buyers. KPMG forecasts house prices to rise 6.6% and unit prices 7.1% in 2026—among the strongest projections nationwide.
Hot Victorian Suburbs
Key growth areas include:
- Frankston: 11.7% annual growth, driven by coastal lifestyle and hospital redevelopment
- Pascoe Vale: 15.2% growth with strong rental yields
- Brimbank: 8.8% growth as Metro Tunnel improves accessibility
- Tullamarine-Broadmeadows: Airport rail link boosting demand
Units Outperforming Houses
The unit market has been particularly strong, with suburbs like Murrumbeena (up 50.4%) and Abbotsford (up 34.1%) showing exceptional growth. Affordability and lifestyle preferences are driving apartment demand.
First Home Buyers in Victoria
Victoria offers a $10,000 First Home Owner Grant for new homes up to $750,000 in regional areas. The off-the-plan stamp duty concession has been extended until October 2026, making apartments and townhouses more accessible.
Land Tax Considerations
Victoria's land tax regime has made some investors cautious. However, for owner-occupiers and strategic investors, Melbourne presents compelling value compared to Sydney and Brisbane.