Two of Australia’s quieter property markets are showing renewed strength, with both Melbourne and Darwin shifting decisively into growth mode, according to Ray White Chief Economist Nerida Conisbee (pictured).
House prices in Melbourne rose 3.1% over the past quarter and 5.3% over the year – the city’s strongest pace of growth in more than two years.
While still below the national average, the improvement marks a clear turnaround from the flat market of 2023 and early 2024.
Melbourne has now edged just above its previous peak, with prices sitting slightly higher than during the 2021–22 upswing – a symbolic milestone confirming the city’s return to growth.
“The market is still operating below its long-term potential, but the direction of movement is clearly upward,” Conisbee said.
Melbourne’s 5.3% annual gain is also its strongest since 2017, reflecting how affordability improvements and renewed migration are drawing buyers back into the city.
The city’s strongest gains have been recorded in established middle-suburban areas, including Wantirna, Chelsea Heights, Croydon Hills–Warranwood, Rowville, and Dingley Village, where annual price growth sits between 6.8% and 7%.
These aren’t Melbourne’s priciest postcodes but are well-connected, family-friendly corridors that have benefited from improving affordability, easing borrowing conditions, and renewed buyer confidence.
Darwin’s recovery has been even stronger, with prices rising 3.9% over the quarter and 11.1% over the year — placing it alongside Perth, Adelaide and Brisbane as one of the nation’s top performers.
“Darwin’s recovery is being driven by extreme supply shortages and strong investor demand,” Conisbee said.
Rental yields remain among the highest in Australia, and new construction is limited. With fewer than 200 new listings in September and sales volumes lifting sharply, prices have responded quickly.
Suburbs such as Moulden, Gray, Bakewell and Woodroffe have led the way, recording annual growth between 13% and 16%. These middle-ring family suburbs within 20 kilometres of the CBD offer affordable freestanding homes and attractive rental returns — the kind of stock most in demand from both investors and first-home buyers.
Fresh listings data show a clear rise in seller confidence.
Rising supply in strengthening markets typically signals confidence rather than weakness, as vendors move to capitalise on firmer prices and faster sales.
Nationally, PropTrack’s Home Price Index showed a 0.5% monthly rise in September – the ninth straight increase – while Cotality recorded a stronger 0.8% lift, the sharpest since October 2023. These results confirm that despite moderation, the national recovery remains intact and broad-based.
Broad trend data highlight how the two cities have both diverged and converged over time.
The narrowing gap between the two markets underscores how Australia’s housing recovery is spreading to cities that were slowest to rebound.
Outlook: population growth and possible rate cut to support momentum
Looking ahead, Conisbee said conditions remain broadly supportive for continued growth.
“Buyers are returning to Melbourne as relative affordability improves and population inflows rebuild following several years of subdued migration,” she said.
She added that the possibility of a November rate cut could provide an additional lift to sentiment and borrowing power heading into summer. With population growth and tight construction pipelines continuing, these factors are likely to underpin further price momentum.
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