Melbourne is Australia's second-largest city and one of its most complex property markets. With a median house price near AUD 828,000 in 2026, lower than Sydney but still among the highest in the developed world, Melbourne offers a combination that its northern rival cannot: deeply compounded long-term equity, a current market that has softened meaningfully from its peaks, and a structural undersupply that continues to provide a long-term floor under values.
CONTACT DONALD KLIP — GLOBAL MORTGAGE GROUP
Equity Release | Bridging Loans | Bridge Financing | Australian Property
[email protected] | +65 9773-0273 | www.gmg.asia
For Melbourne property owners who purchased before 2015, the equity position remains extraordinary despite recent price moderation. And for sophisticated borrowers, a softening market is not a reason to sit still. It is a reason to act, to access equity through bridging loans and equity release facilities before market conditions change, and to deploy that capital into higher-returning opportunities while the window is open.
The Melbourne Market in 2026: Softening With a Structural Floor
Melbourne recorded a 0.6 percent quarterly price decline in the first quarter of 2026, the sharpest of any major Australian capital. The combination of higher borrowing costs, elevated land tax under Victoria's progressive property tax regime, affordability constraints, and what analysts describe as the broader 'Melbourne malaise', a period of relative underperformance compared to Brisbane, Perth, and Adelaide, has created a genuine buyer's market in some segments.
KPMG forecasts Melbourne house prices to rise 6.8 percent over 2026, which, if realised, would represent a recovery from the first-quarter softness and position Melbourne as one of the stronger performers in the second half of the year. AMP's Dr Shane Oliver has specifically identified Melbourne as one of the markets most likely to see a 'rotation back' from the boom cities of Perth and Brisbane as those markets hit their own affordability ceilings.
The structural story is unchanged. Melbourne faces severe housing undersupply. Population growth, driven by international students, skilled migrants, and strong net interstate migration from Sydney, continues to press against a supply base that cannot expand fast enough. Land tax has encouraged some investor selling, which has modestly increased listing volumes, but absorption rates remain strong in the inner and middle rings.
Where the Equity Is: Melbourne's Inner Suburbs
Melbourne's deepest long-term equity positions are concentrated in the inner east and inner south, where premium suburb prices have compounded over decades.
Toorak, Melbourne's wealthiest suburb, has median house prices exceeding AUD 5 million and a property culture built on long-term ownership. Many Toorak owners have held their properties through multiple cycles and carry minimal debt against assets that have appreciated dramatically from their original purchase prices. The equity available in a single Toorak property can represent AUD 4 to 8 million or more of deployable capital.
South Yarra, Hawthorn, Malvern, Armadale, and Brighton form a band of premium suburbs where median prices run from AUD 2 million to AUD 4 million and long-term owners are similarly equity-rich. These suburbs attract a mix of established family wealth, senior professionals, and investors who purchased decades ago and have watched their assets compound.
The inner north: Carlton, Fitzroy, Collingwood, has experienced its own appreciation cycle, driven by gentrification, proximity to the CBD, and lifestyle appeal. Properties here, purchased for AUD 300,000 to AUD 500,000 in the 1990s and early 2000s, are now worth AUD 1.5 to AUD 2.5 million. Many of these owners have never refinanced and are sitting on equity they have no mechanism to access.
Why Softening Is Opportunity for Equity-Rich Owners
A counterintuitive point that is worth making clearly: for owners who already hold Melbourne property with strong equity positions, the current market softening is not a threat. It is an opportunity.
The equity position of a Toorak owner who purchased in 1995 is not materially affected by a 0.6 percent quarterly dip. Their property is still worth AUD 6 million against a purchase price of AUD 700,000. What the softening does create is a buyer's market dynamic in certain segments, an opportunity to acquire additional Melbourne property, or to access equity for deployment into higher-yielding markets like Perth or Brisbane, at a moment when the seller is more motivated and the terms are more favourable.
Bridge financing and equity release are the tools that allow equity-rich Melbourne owners to move in this environment. Access the equity from the existing property. Deploy it into the acquisition or investment. Exit the bridging loan through sale or refinance when the opportunity matures. This is active capital management using property as the base.
Victoria's Land Tax: A Driver of Bridging Finance Demand
Victoria has one of the most progressive land tax regimes in Australia, with rates that increase with the total unimproved value of land held in the state. For investors with multiple Melbourne properties, land tax obligations can be substantial, and are payable annually regardless of whether the property is generating sufficient income to cover them.
For some Melbourne investors, the combination of land tax obligations, elevated interest costs, and a softening rental market has created cash flow pressure that equity release can address. Accessing dormant equity through a bridging loan to fund tax obligations or property improvements, while retaining ownership of assets that have compounded significantly, is a more efficient outcome than a forced sale into a soft market.
"Melbourne is a market where the long-term owners are sitting on extraordinary equity and the short-term noise is creating an impression of weakness. Sophisticated borrowers know that the noise and the equity are two separate things. Bridge financing connects them to their wealth without requiring them to participate in the sentiment cycle." — Donald Klip, Co-Founder and CIO, Global Mortgage Group
CONTACT DONALD KLIP — GLOBAL MORTGAGE GROUP
Equity Release | Bridging Loans | Bridge Financing | Australian Property
[email protected] | +65 9773-0273 | www.gmg.asia
Melbourne Expatriates and the Equity Access Gap
Melbourne has a large and financially successful expatriate population, Australians who have maintained Melbourne property while working overseas. Many of these owners purchased their properties before leaving Australia, have watched values increase significantly during their time abroad, and now want to access equity for overseas investments or to bridge a gap before returning.
The same foreign income shading problem that applies in Sydney applies in Melbourne. Australian banks assess overseas income at a discount. Many will not lend to non-residents at all. GMG's Melbourne equity release facilities are available to expatriate borrowers on the basis of property value and LVR, the income structure that makes bank lending impossible does not affect our assessment.
Getting Started with Melbourne Equity Release
To receive an indicative term sheet for a Melbourne bridging loan or equity release facility, GMG needs the property address and type, current estimated market value, existing mortgage balance if any, the loan amount required, the intended term, and a brief description of use of funds and exit plan. Indicative terms are typically available within 48 to 72 hours.
CONTACT DONALD KLIP — GLOBAL MORTGAGE GROUP
Equity Release | Bridging Loans | Bridge Financing | Australian Property [email protected] | +65 9773-0273 | www.gmg.asia
