The Rent Record
Melbourne’s advertised rent median hit $600 a week in September, a 5.3 per cent lift on the same month last year, which is about $30 more each week and $1,560 over a year, per the realestate.com.au Rental Report of 9 October. Sydney still tops the table at $800, and the city is the cheapest place in the country to rent a house, level with Hobart. Vacancy sits at 1.9 per cent, the most choice any capital offers.
Smaller sums have dominated the public argument. Everybody’s Home’s Maiy Azize told the Herald Sun that an extra $20 is devastating for households already cutting back on food and medication. The market delivered more than that.
The Falling Market
Values have moved the other way. Cotality’s national index was 1.1 per cent lower in September, a sixth consecutive monthly decline, and Melbourne gave up 0.7 per cent. Measured across twelve months, the city’s dwellings are 6.2 per cent cheaper and 7.2 per cent beneath the November 2025 peak.
How far it runs depends who you ask. HSBC’s Paul Bloxham sees national values 13 per cent lower by the middle of 2027, built from federal investment-property tax changes and higher rates. Tim Lawless, Cotality’s research director, told the ABC that a fall of 10 to 15 per cent is “probably a fairly reasonable estimate at the moment”. Shane Oliver at AMP reserves 20 per cent for a worst case, and sees recession risk beyond 15 per cent. Closer to a buyer’s budget: four rate rises this year have cut about $45,000 from what someone on $109,000 can borrow.
What a Fall Does to a Deposit
Jason Pizzino, who founded TIA Investor, told news.com.au that a 20 per cent decline would wipe out a deposit of the same size, $200,000 on a $1 million home, with recovery taking two decades. Picking the turn, he argues, means buying into a slide.
Put down 10 per cent on a $1 million home and a 15 per cent national fall leaves the debt above the property’s value, before selling costs.
Why Rents Are the Floor
Rents are why the deepest scenarios stay unlikely. Tenants Victoria, drawing on Cotality data, reports gross rental yields averaging 3.7 per cent across the eight capitals, the strongest since 2019, and 4.1 per cent in Melbourne: softening values paired with firm rents lift the return on a tenanted home, which has pulled private capital back in past cycles. The 2 to 3 per cent vacancy that REA’s Megan Lieu calls balanced still sits above Melbourne’s 1.9 per cent.
Why Waiting Is Its Own Bet
Michael Yardney, Metropole’s founder, agrees there is further to fall and says the trough cannot be called in advance. His guidance: move only if the budget survives another rate increase, and be willing to disregard the headlines for up to a year. In his reading confidence returns by the June quarter of 2027, when the turn will already have happened.
A few percentage points either way will not matter over a decade, he adds; a forced sale in a downturn will.
What to Watch
Pizzino’s test is days on market, and SQM Research’s September release supports the worry: national listings climbed 2.6 per cent in the month to 276,839, 21.6 per cent above a year earlier. Melbourne accounts for 49,341 of them, the largest holding of any capital and 30.3 per cent more than last September, with older listings up 29.6 per cent. SQM reads the build-up as conditions tilting toward buyers.
Vacancy is the other gauge. If Melbourne’s 1.9 per cent keeps rising toward 3, rent growth should keep easing. Below 1.5, $600 will not hold as a ceiling for long.
MapView readers can run their own suburb in the app, where the Time to Buy or Sell tile compares buyer and seller conditions on recorded sales, not advertised prices.
