“May Market Update: Values continue to climb despite softer growth pace”
Hi everyone, I’m Jason Mudford from OBrien Real Estate with the May property news for 2025.
Australia’s housing market maintained its upward momentum through May, with the latest Cotality Home Value Index revealing a 0.4% increase across all dwelling types in Metropolitan Melbourne. Across the last 12 months, Melbourne is now tracking 1.2% down on home values, whereas nationally, home values aggregately have increased 3.3% over the last 12 months.
Across Melbourne, premium suburbs are seeing stabilisation, while outer and middle-ring areas continue to show solid buyer interest, particularly for family homes with good transport access. While growth has moderated compared to earlier in the year, the market remains resilient. Strong population growth, limited listings, and consistent auction activity are contributing to steady performance.
Over the 5 weekends in May the REIV recorded a strong auction clearance rate of 84.5%. The total number of sales across May hit 4,006, in a month where we had a Federal Election and the next Victorian Government Budget release. Later in May we saw the Reserve Bank cut interest rates by a quarter of a percentage to 3.85% with the next decision to be released at 2.30pm on 8 July.
Regional Victoria recorded a 0.6% increase in values for May across all dwelling types. The pace of growth here has softened slightly compared to previous months, but overall sentiment remains positive. Tree-change destinations within commuting distance to Melbourne are still attracting demand, especially from lifestyle-focused buyers and retirees.
The rental market for May saw a 1.2% increase in rental prices for houses. In comparison to other major states, Melbourne fared the worst with both Perth and Hobart recording a 4.6% jump. Unit rental prices are faring better in Melbourne due to their affordability with a 1.9% increase however other states are recording better growth with Perth, Adelaide and Hobart all reaching over 7% growth for the month.
Looking ahead, while the rate of value growth is easing, the outlook remains cautiously optimistic. Low levels of housing construction, immigration-driven demand, and stable lending conditions suggest prices may continue to edge higher into winter.
Remember, the information provided is of a general nature – always seek independent legal, financial, taxation or other advice in relation to your unique circumstances.
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