Melbourne Is Australia’s Best Value Property Market in 2026 (Here’s Why)

A $460,000 median price gap between Sydney and Melbourne doesn’t happen by accident—and it doesn’t last forever. We dig into why Melbourne’s recent underperformance has created a rare pocket of value, how the affordability edge protects buyers from rate stress, and where the data signals momentum is building beneath the surface.

We start by tracing the long‑term relationship between the two cities: Melbourne has typically been more affordable than Sydney, but 2024 stretched that to a twenty‑year record. Even now, Sydney’s median hovers around $1.29 million while Melbourne sits near $830,000. Then we zoom in, suburb by suburb, comparing locations at similar distances to each CBD. The differences are stark: a 17‑kilometer Melbourne suburb at roughly $630,000 versus Auburn at around $1.45 million, and multiple corridors where Melbourne’s entry price undercuts Sydney by 28 to 56 percent. These are not just numbers; they are signals of where buyer demand can move when budgets meet lifestyle trade‑offs.

The twist comes from incomes. ABS estimates show average weekly earnings are surprisingly close—about $1,500 in Sydney and $1,400 in Melbourne. If the paycheck gap is small but the property gap is huge, borrowing capacity stretches further in Melbourne before households hit their ceiling. That creates room for catch‑up growth as confidence returns, listings tighten, and affordable pockets attract both homebuyers and investors. We share the filters we’re using on the ground—owner‑occupier depth, transport links, school zones, low vacancy, constrained supply—and explain why not every “cheap” asset is a good buy. Discipline is the moat: focus on resilient streets, solid land value, and suburbs already showing 6 to 12 percent momentum.

If you’re weighing where to place your next dollar, this is a data‑driven map for spotting mispricing and acting before consensus catches up. 

Transcript

Melbourne’s Affordability Edge

SPEAKER_00 0:00

Melbourne is one of the most affordable east side locations in a capital city within Australia in 2026. Melbourne at the start of 2026 is$460,000 more affordable than the Sydney market. Massive gaps like this don't last forever, and Melbourne is one of those marketplaces that is set to perform, and affordability is going to be one of the driving forces. In this episode, we're breaking down long-term data. We're breaking down suburb data on affordability comparison to Sydney, as well as income levels in Sydney versus Melbourne. My name is Casey Taylor. I'm the host of the Tailored Property Wealth podcast. And we are here to provide as much value to you as the viewers and listeners as possible around everything regarding property investing to make sure you can go out there and make educated decisions that's going to change your financial future. We're going to get into it today, and we're going to be starting on the long-term data of affordability with Melbourne versus Sydney. Now, over the last decade, Melbourne has been 29% more affordable than that of Sydney. That is the average over the last decade. Now, some of the recent data really highlights the disparity between the two marketplaces. So PropTrack recorded in 2024 in August that Melbourne is 70% more affordable than that of Sydney. And that's the largest gap over the last 20 years. And that is PropTrack data, just to confirm. So that is a massive, massive disparity. It's come back in a little bit and we'll get to that in a moment. However, the gap in 2020 between Sydney and Melbourne was only$250,000. That 2024 data, the difference was$600,000, with Sydney being higher than Melbourne. So if we compare that to five to six years ago, we can see that it was a lot closer. And because of Melbourne's underperformance over the last five to six years, it is extremely affordable now in 2026. We know that Melbourne hasn't performed strongly, and that is because how they handle COVID. There was a lot of lockdowns, a lot of restrictions which hurt the local economy. And we know that how the economy is doing affects the property market. If people's incomes are affected, their borrowing capacity is affected. And if their borrowing capacity is affected, it's going to translate into those property prices. And we're going to get to that today with the income levels on these two cities and show you the massive potential from a borrowing capacity ceiling level. If we can see that a marketplace has underperformed, it has a massive amount of affordability, and we look at that long-term data of how Melbourne's performed over 10, 15, 20 years, and we compare it to the last five years, we know based on history that that market should overperform over the next five years. It should do higher than the long-term average because of the underperformance. This is some of the worst performance in Melbourne's history, and it is directly related back to how they handled COVID. Now, if we look at the disparity now, early 2026, and this is catality data, on the 31st of January 2026, we have Sydney's median value at$1.29 million in comparison to that of Melbourne at$830,000. So that is the$460,000 difference. A little bit of context, it's Brisbane data and it's comparison to Sydney, with that Sydney value of$1.29 million as the median value. Brisbane's median value is$1,054,000. So it's a difference of$235,000. Brisbane being more affordable than Sydney. A lot of people are talking about Brisbane's unaffordable, it's gone on that massive growth run. But if we look at that Sydney marketplace, there is still affordability there. Affordability helps us when we're investing to not be affected as much of some of the things that go on, like our interest rates and the interest rate increase. It more affects the higher-end marketplaces where they're closer to their borrowing capacity ceiling. The affordable locations are a lot more resilient because many people can still transact within that affordability, an affordable location. That is crucial. And we really we try and target those affordable locations, not just holistically across the country and the capital cities, but when we're looking at a location, if we can be getting into the most affordable part of that city, it's going to help us because people are going to get pushed out of the more expensive pockets and they're going to go into that affordable location where they can get in. It keeps that pressure there. So it's something important to note. Now, what I'm going to do is break down individual suburbs and suburbs that we're investing in in Melbourne and then suburbs in Sydney that are a similar location distance from the CBD. And we're going to highlight the affordability piece. So suburb number one, we have where we're investing in right now with Melbourne,$696,000 is the median value. It's 30 kilometers from the CBD. If we compare that to suburb one being Ashcroft in Sydney, the median value is$975,000. Its distance to the CBD is$9 kilometers. Very similar distance. So based on those numbers, that Melbourne suburb is$279,000 more affordable. That is a 28.62% difference in the Melbourne market being more affordable. Suburb number two within Melbourne, the median value is$549,000. The distance to the CBD is 37 kilometers. So it's further from the CBD. The price difference is$591,000. As a percentage, it's$51.84% more affordable in that Melbourne location than that of Sydney. Suburb number three, median value,$630,000 for the Victoria Melbourne suburb, and the distance to the CBD is 17 kilometers. If we look at Auburn in Sydney, same distance, 17 kilometers from the CBD, the median value is$1.45 million. So that's a difference of$820,000 or$56.55%. Some massive differences there if we're looking at those two cities. We can look at the median value and understand that Melbourne's more affordable, but we can look at individual suburbs and where that median value is now in comparison to where the median value is in Sydney. Now you might be thinking, well, what does that have to do comparing the two? Between Melbourne and between Sydney. Yes, there's going to be a lot of other things, population growth, infrastructure, lots of things we can go through. But today I purely want to look at income levels. And this is coming back to that borrowing capacity ceiling and piece. Now the ABS in August 2025 has data on Sydney and Melbourne and the employee earnings, and this is approximate, Sydney generating$1,500 per week as the average employee earnings in comparison to Melbourne at$1,400. So there's approximately$100 difference on average for this data. So if there's only a$100 difference in terms of income between the two cities, but we have the massive disparity with price point, that tells us that there's a massive amount of room to grow in the Melbourne marketplace with that affordability piece. We've got price point here in Melbourne. However, we know based on income levels that it can be pushed far greater and far higher. And that's where that room for growth is. And if we couple that back with many other metrics, we can see that it's going to perform strongly. This is getting right into the data and really looking at that affordability piece. This is why we see value in the Melbourne market right now. You can compare it, and I say this to clients all the time, you can compare it to where Brisbane was five, six years ago, where it had sat flat for a period of time. It hadn't done much. Everyone was talking about Brisbane's got to go, Brisbane's got to go, Brisbane's got to go. And it finally went and it's performed strongly over the last five years. That is where Melbourne is now. It has not done much over the last five years. And it's really starting to ramp up. These areas we're targeting, like I said, six to twelve percent growth roughly now. That's going to continue, it's going to continue to warm up, and there is going to be more pressure in those marketplaces. This does not mean you can go and purchase in Melbourne right now and get growth. You have to be strict with your asset selection. You have to be strict with your location and your due diligence to ensure you're getting in the right locations to get this performance. If you're not sure where or how to target the Melbourne property market, this is where there is an opportunity. You can reach out to us. We can look to book in a discovery call and see if there is an opportunity to help you build your wealth through property and get into that Melbourne property market. We can help you make that educated decision, purchase that asset that's going to be the foundational asset within your portfolio to help you keep moving forward and build wealth. That is the episode for today. I hope you have seen value in this episode. It's a great one to look at some of that data, look at the median prices, look at the income in those areas, and understand where the Melbourne property market is. It is cheap. It is very, very cheap right now, and it's going to see that growth. We're investing there strongly with clients, and personally myself, I'm investing there. Hope you've enjoyed the episode, and we'll see you on the next one. Thank you.