How’s The Market? Spring Has Arrived… Is Melbourne’s Property Market About To Get Worse?

In This Week’s How’s The Market | Edition 168

• Is Melbourne Turning a Corner?

• Spring Could Shift the Market

• A Showstopper by Hawksburn Village

Spring has officially arrived in Melbourne.

And normally this is the point in the year where we start talking about more listings, more auctions, more buyers coming back into the market and generally a lot more activity.

But this year feels very different.

Melbourne property prices have been falling.

Auction clearance rates have been weak.

Interest rates have gone up three times this year.

And buyer confidence is probably the lowest I have seen in quite a while.

According to Cotality, Melbourne values fell another 1.1% in August. PropTrack’s data also shows Melbourne houses are now around 6.3% below their peak.

And heading into spring, Melbourne’s auction clearance rate has been hovering around the low 50s, compared to around 70% this time last year.

So the question is…

What happens when we potentially add thousands of new properties to a market that is already struggling to absorb the stock that’s available?

Could spring actually see Melbourne’s property market improve?

Or could this be one of the better buying opportunities we’ve seen in years?

Today, I’m going to go through what I’m seeing on the ground and what I think buyers should be watching over the next three months.

Spring Has Arrived… Is Melbourne’s Property Market About To Get Worse?

1. Can We Trust The Data?

I’ve had some clients come to me this week and say that it sounds like the market is rebounding, as some sales agencies across Boorondarra and Stonnington have reported their office clearance rates at 80%.

Now we did see this and a meaningful recovery in the data that we recorded as well, however, I still don’t think that it paints the full picture.

Our total recorded clearance rates and results across properties scheduled for auction above $1.5m in Boroondara, Stonnington, Port Phillip & Yarra was 58.6% on the weekend of Aug 30th

Port Philip recorded 33% clearance rate on 1 of only 3 sales.

Yarra recorded a 0% clearance rate on 0 of 3 sales.

Boroondara recorded 64.28% on 14 auctions.

Stonnington recorded 77.7% on 9 auctions.

Though the interesting thing about this data is that there were more properties scheduled for auction last weekend, however, due to poor campaigns with no buyers the agents changed the sales type over to either a private sale or expressions of interest sale type mid-campaign.

These properties, which would not have sold at auction, are now not included in the data.

This is happening more regularly than you might think.

2. How Are Individual Suburbs Performing?

You have probably heard me say that the upper end of the market is performing worse than the lower end of the market.

Though let’s look at a handful of suburbs’ actual performance so far in 2026, as this can help give you a snapshot of some of Melbourne’s local markets.

These are median sale price numbers on houses supplied by PriceFinder.

This shows that every suburb has performed drastically differently so far in 2026.

These are also median sales numbers, which just means the middle point of the data, this does not necessarily mean that every individual property’s value has fallen by this amount.

3. Vendors Could Be Competing Against Each Other

This is probably the biggest thing I’m watching.

Spring traditionally brings a lot more property to market.

And usually that’s fine because you also have more buyers entering the market.

But what happens if the listings come…

And the buyers don’t?

We already have a market where properties are taking longer to sell, auctions are passing in and vendors are having to adjust their expectations.

Cotality’s final clearance rate across the combined capitals was below 50% for 12 of the 13 weeks leading into the end of August.

In Melbourne, only 51.9% of auctions sold in the week ending August 23 compared with 70.9% at the same time last year.

If we now get a large increase in listings throughout September and October without a corresponding increase in buyer demand…

That’s going to create more competition between vendors.

And that’s good news if you’re a buyer.

4. Buyers Are Already Nervous

The other side of the equation is confidence.

The market doesn’t necessarily need another interest rate rise tomorrow for buyers to remain cautious.

We’ve already had three increases this year.

Borrowing capacity has reduced.

Repayments have increased.

And every week there’s another headline about property prices falling.

That changes behaviour.

Buyers who might have stretched $100k six months ago are now saying:

“Let’s wait.”

“We’ll make a low offer.”

“If we miss it, something else will come up.”

And when enough buyers start thinking like that, it becomes very difficult for vendors to create competition.

This is probably the biggest difference between the market today and the market 12 months ago.

Buyers aren’t scared of missing out.

They’re scared of overpaying.

5. But Good Properties Are Still Selling

This is the important caveat.

I don’t think you can say:

“Melbourne is falling, therefore every property is falling.”

That’s just not what we’re seeing.

Really good properties are still selling.

The 9 or 10 out of 10 homes can still attract multiple buyers.

Particularly when they’re scarce.

Great street.

North-facing backyard.

Good land.

Great floor plan.

Beautiful renovation.

Walk to schools, shops and transport.

Those properties can still create competition.

It’s the 6, 7 and 8 out of 10 properties where things are getting really interesting.

The home on the slightly busier road.

The beautiful house without a garage.

The property that needs $300k spent on it.

The compromised floor plan.

These are the properties where buyers suddenly have leverage.

And if spring creates even more choice, I think that gap between exceptional and average property could get even bigger.

An interesting example from the weekend was 2 Rosslyn Street, Hawthorn East, Vic 3123.

This property was listed with Sam Christensen from A-Z Real Estate – a great agent.

It was quoted $1,700,000 – $1,870,000 and through a competitive auction process, this property soared past the reserve and ended up selling for $2,205,000.

But the market is falling right?

So why did it sell?

This property was an architectural home, at a competitive price point, in a great street.

It needed some love, but it was also filled with character and additionally, it had no heritage overlay.

This meant that it attracted multiple different sorts of buyers to the auction and this was reflected in the results.

6. So… Is The Market About To Get Worse?

Maybe.

I certainly wouldn’t be surprised if increased spring stock puts further downward pressure on parts of Melbourne.

But I also don’t think buyers should sit around waiting for some magical moment where someone announces:

“This is the bottom.”

Nobody knows where the bottom is until after it has happened.

And if you’re buying and selling in the same market, or you’re planning on owning the property for 10 or 20 years, trying to perfectly pick the bottom probably shouldn’t be your strategy anyway.

What matters is whether you can use the current conditions to buy an exceptional property at a price that makes sense.

Because right now…

Buyers have something they haven’t had for a long time.

Time.

Choice.

And negotiating power.

Spring might make the market worse for vendors.

But that could make it significantly better for buyers.

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