MELBOURNE, VIC – 14 May 2025 – Victoria’s housing market is entering a new chapter, with Melbourne and surrounding regions expected to benefit from renewed growth in 2025. After a period of subdued activity, recent data and expert analysis point to a positive shift in momentum, supported by surging population growth, major infrastructure investment, and a strong economic foundation.

While Melbourne has lagged behind other Australian capitals in recent growth cycles, current market conditions are opening up a window of opportunity for investors and owner-occupiers alike. With property prices in many areas still below their previous peak and interest rates likely to ease, renewed buyer confidence is expected to stimulate activity across metropolitan and regional markets.

This resurgence is anticipated to benefit growth corridors in Melbourne’s North and West, as well as regional hotspots like Geelong and Gippsland, where demand for quality housing remains strong.

Analysts note that not all areas will perform equally. Inner and middle-ring suburbs with owner-occupier appeal and limited housing supply are expected to see the most consistent growth. Meanwhile, off-the-plan and high-rise apartment sectors may face continued headwinds due to potential oversupply. In contrast, well-located family homes and townhouses—particularly in gentrifying suburbs and emerging communities—are projected to offer a compelling mix of capital growth and rental returns.

A key driver of this expected growth is Victoria’s ongoing housing undersupply. Building approvals have dropped to historically low levels, even as migration reaches record highs and rental vacancy rates sit at all-time lows. This imbalance is expected to place upward pressure on both home prices and rents throughout 2025 and beyond.

Impact on Homebuilders Like Fairhaven Homes
These changing conditions are expected to influence the operations and strategic planning of local homebuilders such as Fairhaven Homes, which has a strong footprint across Melbourne’s North and West, Gippsland, and Geelong. As buyer sentiment improves and demand increases, builders may face renewed pressure to deliver new housing in key growth corridors.

However, challenges remain. Supply chain constraints, labour shortages, and planning delays continue to impact construction timelines and project delivery. At the same time, government initiatives to fast-track housing supply—particularly in medium-density zones near transport and employment hubs—may shape the types of homes being built.

For prospective homebuyers, this period offers a strategic entry point. With rising rental costs and low vacancy rates, many Victorians may consider transitioning from renting to owning—particularly in well-planned, community-focused estates.

While the short term will require careful navigation, the long-term fundamentals of the Victorian market remain robust. Continued infrastructure investment, economic diversity, and population growth are expected to sustain demand for new homes in the years to come.

For additional insights and detailed commentary on Melbourne’s property market outlook, refer to recent analysis by Michael Yardney.

For media enquiries, please contact:
Fairhaven Homes
📧 [email protected]
📞 (03) 9704 4000
📍L6, 1 Peters Avenue, Mulgrave VIC 3170
🌐 www.fairhavenhomes.com.au