OLIVER HUME
The national picture has shifted from four of five major land markets operating at levels above longer-term trend to only three. Sydney is in line with the longer term whilst Melbourne remains sitting below market operating levels. Rates outlook has been skewed, initially predicted two hikes, these have already been delivered in March & May there is still expected to be a 0.25% hike in 2026.
Melbourne Outlook
Due to the deterioration in the rates outlook, impacts of the budget and associated taxation measures, the forecast of any recovery in annual volumes & price growth until 2027 is subdued. The build up of demand from the past 3 years created some of the best relative affordability allowing for Melbourne to quickly respond to changes in demand due to sufficient supply. Forecast of established house price growth is eased from 6% to 8% by the end of 2026 and further 2%-4% by March 2027, with price falls over June & September returning to price growth by Q1 2027.
ACCESS TO TRANSPORT, JOBS & SERVICES
Homes Closer to Public Transport
Melbourne suburbs have experienced slow housing growth despite their close proximity to transport, jobs and services. Labour is releasing the final planning controls for 23 train & tram zones and the final PSPs for 6 new suburban rail loop stations:
- 8 along Frankston line – Hawksburn, Toorak, Armadale, Melvern, Glen Huntly, Ormond, Bentleigh, Mentone
- 5 along new Metro Tunnel corridor – Caulfield, Springvale, Noble Park, Yarraman, Dandenong
- 4 along Sandringham Line – South Yarra, Prahran, Windsor, Elsternwick
- 3 along Belgrave & Lilydale lines – Blackburn, Nunawading, Mitcham
- 2 along Alamein Line – Riversdale/Willison, Ashburton
- 1 along a major tram corridor in Toorak Village – serviced by Route 58 Buildings that meet planning rules in the core will be “deemed to comply” (can’t be sent for VCAT speeding up approvals).
The new planning controls will make it simple to build
homes as it reduces red tape & increases certainty about what can be built where. Train & Tram zones will unlock capacity for +300,000 homes in these areas by 2051. The new suburban rail loop will deliver +70,000 homes across Cheltenham, Clayton, Monash, Glen Waverly, Burwood & Box Hill
HOMES AT RISKS OF FLOOD CARNAGE
Melbourne Water has released revised flood maps revealing 20,000 homes at risk of flood carnage. In Banyule 1 in 10 properties could be affected by a significant rainfall event. 44% of impacted properties are catergorised in the 2 lowest zones which is considered safe for people and building. 16% of the Moonee Valley local government area could be affected with 4 in 5 rated in 2 lowest risk categories. 1,400 homes fall into the next highgest category considered unsafe for elderly, children and vehicles. 7% properties are rated high risk where floodwaters are unsafe. Letters will be sent to properties which are identifies as at risk.
- Melbourne Water updated 1 in 100 event flood mapping.
- Banyule and Moonee Valley LGAs amongst the hardest hit
- Impacts of climate change to 2100 considered
- Flood maps for Darebin, Merri-bek, Yarra and Glen Eira also released
- Work continues on another 38 LGAs
EVC VEHICLE SALES
In 2025 there were 1173 Polestar sales compared to 1202 sales in 2026, a 2.5% increase. In 2025 there were 14146 Tesla sales compared to 23588 sales in 2026, this is a 66.7% increase. Tesla model Y’s are most popular rising by 95.5% in sales in 2026 compared to 2025.
LABOUR REGIONAL JOBS GUARANTEE
$18 billion in wages for regional Victorians
Our energy workforce is at the heart of Victoria’s transition to a clean, reliable and affordable energy future. From engineers and electricians to planners, apprentices and regional workers, our people are building the systems that power homes, businesses and communities. To meet growing electricity demand and support Victoria’s energy
transition, the energy workforce needs to grow. By 2040 it’s projected that Victoria will need approximately 68,000 FTE workers in the energy sector, an increase of 23,000 FTE workers from 2026. To support the growing energy sector, the Victorian Government has developed the Victorian Energy Jobs Plan and the Women in Energy Strategy. As of July 2026, Victoria has the highest unemployment rate in the nation at 5.1% (ABS, 23/07/26)
- Labor to grow energy force by 50% to 2040
- 68,000 energy jobs with 37% in regional Victoria
- State target of 95% renewable energy by 2035
$4.62 billion in Gippsland wages - Electricians, plumbers, construction workers, labourers, engineers, mechanics, ICT managers most in demand jobs
LABOUR FAST-TRACKING HOMES
Labour has stepped in to fast-track 4 PSP in Geelong’s North & West. This will unlock +23,000 homes for more than 66,000 Victorians. Council was supposed to start submitting PSPs for approval from 2023 and has not submitted a single one. Hence why the government is stepping in to unlock them a decade ahead of council’s schedule. Labour is working smarter, building two 3D printed social homes in Geelong. Cutting build time to just 3 months per home.
- 23,000 new homes in Geelong’s north & west growth areas to be fasttracked the State
- Batesford North, McCanns Lane/Merrawarp Road, Batesford South, and Heales Road East PSPs
- Labor is also testing 3D printed social homes in Geelong
FEDERAL TAX CHANGES COULD WIPE OUT THE VICTORIAN BUDGET SURPLUS
Stamp duty receipts expected to take a hit
Government projected a $1b surplus for the 2026-27 FY in its May budget, a figure underpinned by $10b in stamp duty. However new figures show Melbourne house prices have plummeted since the negative gearing and CGT changes. In the June quarter, the median house price fell by 3.1% to $952,500, a drop of $30,000. The median prices for units fell by 2.1% to $643,500 in the 3 months to June 30, drop of $13,500. Home sales were concentrating in lower price brackets, which are likely to have a higher number of first-home buyers who benefit from stamp duty tax concessions. FHBs pay $0 in stamp duty for a sale price of up to $600,00 and a small amount for up to $750,000. Budget projected stamp duty revenues would fall from $10.6b to $10b in the 2026-27 FY, before climbing back to $12.4b by 2029-30.
VIC METRO MARKET
