Melbourne’s property market in 2026 is tougher than it was, with two recent RBA rate rises impacting buyer borrowing capacity. While not a collapse, it’s a market that demands realistic pricing and preparation from both sellers and buyers.
How is the South East performing?
Officer, Pakenham, and Wantirna are proving more resilient than Melbourne’s outer western and northern corridors. This is driven by ongoing population growth, infrastructure investment, and relative affordability. Stock on market remains below long-run averages, which is providing a floor under prices.
Is it a good time to sell in the South East?
It’s more challenging than 12 months ago, but sellers who price accurately and present well are still achieving solid results. Competing stock levels in Officer and Pakenham remain relatively low, and active buyers right now are typically pre-approved.
What about rentvesting in 2026?
Rentvesting – renting where you live and buying an investment property – can make sense in the South East, with entry prices ranging from $580,000 to $720,000. Yields of 4.0 to 4.5 percent are keeping holding costs manageable. However, two recent rate rises have tightened cash flow, so updated financial modelling is essential.
The honest reality
Sellers who price to 2026 borrowing capacity are transacting. Those pricing to 2021 optimism are not. Well-presented homes priced to today’s buyer reality are still selling, but properties sitting at previous prices are not.
Questions to consider
- What is your borrowing capacity in the current rate environment?
- How does your property compare to recent sales in your immediate area?
- Are you prepared to adjust your expectations to meet current market conditions?
Talk to KR Peters for a straight-talking appraisal with no obligation.
krpeters.com.au
Market information is general in nature and reflects conditions
at the time of publication. For advice specific to your property,
contact KR Peters.