Early Signs for Victoria 2026

Residential Property Market

Market recovery and growth outlook based upon our analysis of the market would suggest that the market is poised to be static, with a continuing cycle of demand and supply, however, reflective of asset class and, importantly, price point.

We note improved relative affordability compared with Sydney and Brisbane, attracting interstate buyers. This is reinforced by a number of residential multi apartment developments being purchased from across the border.

We are seeing demand as usual driven by family requirements, inclusive of schools, transport and shopping amenities, with established areas having a price point of $1,000,000 to $1,500,000 witnessing a steady demand level from purchasers.

The apartment market, although considered static, is being increasingly sought after due to affordability constraints.

Data would suggest that growth areas to be considered would include Frankston, Casey, Hume, Dandenong, Wyndham, Melton and Whittlesea.

Demand is also evident from baby boomers, downsizers and professionals for apartments of an owner occupier nature.

One factor to consider is the introduction of reforms as proposed by the State Government in relation to the publishing of reserve prices. A considered positive for purchasers providing a degree of confidence in the auction process.

Commercial Property Market

Simply, the suburban commercial office market has and continues to struggle with the vacancy factor being at an all time high, with no variance in sight. Reasons, in short, government support and hybrid work trends. Demand is considered at best static.

The industrial market remains above average, driven by e-commerce growth, Melbourne’s strategic logistic position near major transport routes is supported, in the main, by owner occupiers. Although now tapering off, vacancy rates in key precincts are tight and rents competitive.

Retail sector, as always, finds a way. It is a static sector with a degree of increasing vacancies. Economic climate has and will continue to plague submarkets, with food and beverage hurting, however, sustaining the variances.

Investment Sentiment

Melbourne has and will continue to be led by the owner occupier market rather than investor market. Factors of which have been well documented ie. Land Tax, Government regulation, Vacancy Tax, Owner’s Corporation etc, make a return on investment difficult coupled with minimal capital growth.

Migration is now coming under scrutiny, with a variance in numbers to perhaps drop off over the short term.

Interest rates will provide a degree of uncertainty for the investor market, with demand sensitive to increases in general, providing less affordable acquisition and return base.

Conclusion

In summary, the market so far this year has a somewhat positive outlook. Most agents have concurred, noting that inquiry levels are good. Owners/vendors have increased with a silent desire to sell current holdings. The big question is, are there potential purchasers in the market place? Remembering also that this is an election year in Victoria, with the second half of the year to be centered on this outcome.

First Valuation Group is your #1 Commercial Specialist entity for Property Owners and their Advisors. We are independent, strategic and precise, providing trusted commercial property advice across Melbourne.

To discuss any related property matter herein or other issues, please contact
Mark Ruttner, Managing Director

mr@fvg.com.au 0411 419 674