Melbourne Property News Monthly Wrap – February 2026
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Home sales boom in February
Over February’s four weekends the Real Estate Institute of Victoria (REIV) recorded more than 3,154 auctions. 2,290 properties sold. 1,620 at auction, with 597 passed in. 667 properties were sold before auction & 3 properties sold after auction. 1,822 sold by private sale. The auction clearance rate in February averaged 80.5%.
How the new interest rate will effect home sales
The Reserve Bank raised the interest rate by 25 basis points on February 3, from 3.60% to 3.85%. On the average Australian mortgage of $694,000, monthly payments will increase by $109, to $4025.
The hike will reduce borrowing capacity, with a median income Australian household losing around $18,000 from their mortgage limit. If current inflation levels persist and more rate rises follow, a good deal of buyers will shift focus from mid-range properties to lower quartile ones, leading to higher demand in that sector.
There were 1,222 more auctions this February than in February last year, an increase of over 60%. And private sales nearly doubled at 879 more than last year.
House values shoot up in outer zones
Melbourne’s housing market opened 2026 with a marginal increase in averaged values, rising 0.2% over January (NAB Property Market Insights). The median Melbourne house value is now around $989,356. Values are sitting 6.5% higher than a year ago, after 12 months of price growth.
But trends differ widely across the vast patchwork of suburbs. The strongest growth in the 3 months to January (+3% to +6%) was in outlying pockets like Whittlesea, Ballan, Sunbury, Frankston and Coldstream.
Inner east loses steam
A line of blue-chip suburbs going east from the CBD to Mont Albert, generally following the Maroondah Highway softened, losing -3% to -6% in value in the 3 months to January (NAB) – a correction of sorts after last year’s increases.
Unit values down over 5 years
Melbourne house values are an average 20% more expensive now than they were 5 years ago. But surprisingly, units are an average -2.4% cheaper. Unit values have eased again so far this year, slipping -0.2% through January to a median of $639,145. This is -3.1% below their March 2022 peak.
Entry level house values on the rise
Competition is heating up for entry level homes. According to research firm FoundIt, buyer pressure created by migration is not only fuelling price rises on entry level homes, but pushing them past affordability for young Australians out there trying to buy. Particularly in Melbourne’s north and west, in suburbs like Broadmeadows, Coolaroo, Melton, St Albans and Meadow Heights.
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