The Property Market Is Changing — And So Are the Rules
The Melbourne property market continues to present a mixed picture as we move further into spring. While we are seeing encouraging signs of activity, buyers remain cautious and the market is still very much driven by individual property quality, pricing and location rather than broad-based confidence.
On the ground, we are seeing good numbers through a number of open homes, particularly for quality properties in tightly held locations. However, strong attendance is not necessarily translating into aggressive competition. Buyers are doing their homework, taking their time and, in many cases, are prepared to walk away if they believe the price does not represent value.
This caution is understandable given the broader economic environment. The Reserve Bank increased the cash rate by 0.25% in late September to 4.60%, with inflation remaining higher than desired and cost pressures continuing across the economy. The RBA has also made it clear that further tightening remains possible if inflationary pressures persist.
Higher borrowing costs continue to affect buyer budgets and confidence, and this remains one of the major headwinds facing the Melbourne market. At the same time, buyers who are financially well positioned are finding opportunities because they are often negotiating without the intense competition experienced in stronger markets.
Domain's latest Melbourne auction results recorded a 56% clearance rate, with 714 auctions scheduled for the week and 507 results reported. Of those reported, 283 properties sold, while 145 passed in and 79 were withdrawn.
We will be watching the next few weeks particularly closely. Melbourne has a significant auction weekend coming up on Saturday 24 October, which should provide a much better indication of buyer depth and confidence as spring stock levels build. Larger auction weekends tend to provide a more meaningful test of the market than quieter weekends, and we will be particularly interested in the level of competition, pass-in rates and post-auction negotiations.
Another factor sitting in the background is the Victorian state election on the 28th November. Elections can create a degree of uncertainty as households and businesses wait to see the policy direction of the next government. Regardless of the result, greater certainty after the election could help confidence. If the election also results in policy settings that buyers, investors and businesses perceive as more supportive of investment and economic activity, that could further influence sentiment. Ultimately, confidence is an important ingredient in the property market, particularly when affordability and borrowing capacity are already under pressure.
October also marks the introduction of significant changes to Victoria's property pricing and disclosure laws. The changes include the new Property Price Statement and greater disclosure around reserve and sold prices, with the reserve-price requirements applying to auctions and fixed-date sales from 16 October.
These changes have the potential to influence the way properties are marketed, how buyers approach campaigns and how vendors establish their selling strategy. We explore what the changes mean in more detail in this month's Buyer's Advocate and Vendor Advocacy updates.
For now, our view remains that Melbourne is a market requiring patience and careful assessment. There are buyers out there and good properties can still attract competition, but buyers remain selective and price sensitive. For buyers, that is creating opportunities. For vendors, presentation, pricing strategy and choosing the right method of sale have rarely been more important.
The next few weeks, particularly the larger auction weekend on 24 October should give us a clearer indication of where the Melbourne market is heading as we move towards the end of 2026.