Open Home
Is Melbourne property a buy right now?
The gap between Sydney’s median house at ~$1.6M and Melbourne’s at ~$980k just blew out to $517,596 - the widest in over two decades. Cotality
Melbourne is sitting roughly 13% undervalued against its long-run relationship with Sydney.
Values are still 1.3% below the March 2022 peak.
The fundamentals are doing the work.
Population: Melbourne overtakes Sydney as Australia’s largest city in 2031–32. Sydney’s 350,000 lead is narrowing at ~20,000 a year. Centre for Population
Yield: Melbourne unit gross rental yield 4.9%; Sydney 3.1% - the lowest of any capital. National average 3.57%.
Forecast: ANZ has Melbourne as the fastest-growing capital in 2027 (+2.9%), edging Sydney and Darwin. ANZ Research
This week, a Knight Frank survey of 23 global prestige markets found Melbourne and London were the only two cities where luxury spend goes further today than in 2020. AFR
Three Melbourne developers told the AFR on Saturday they were pushing ahead with residential towers despite 30% build-cost inflation, because they think the city will prosper. AFR
So the question is - what do you do?
You can chase Brisbane or Perth into year five of a 60–90% run and assume the ceiling is still well above your entry.
Or you can buy Melbourne at a 20-year-wide discount and back population, yield and reversion to do their job.
(this is not advice, and the dog has had false starts before)
Sources: Cotality HVI · Centre for Population · AFR Property · Last week’s Open Home
Prospector’s Corner
The headlines that matter
Mirvac reaffirmed FY26 guidance Thursday but flagged residential momentum has “moderated” into April - just 281 March settlements against 1,896 for the quarter. AFR
RBA Deputy Governor Andrew Hauser warned of a “nightmare” stagflation scenario at NYU - core inflation 3.5%, the Iran energy shock making the next call harder. Bloomberg
Westpac’s Luci Ellis now sees further hikes in June and August on top of May 5 - a 4.85% peak vs the street’s 4.35%. Westpac IQ
Treasurer Chalmers is weighing cuts to the CGT discount to 33% or 25% from 50% as the 12 May Budget centrepiece. The leaks keep getting more specific. SMH
WA is still Australia’s most popular state for investors - but the AFR is warning the country’s hottest market may be coming off the boil as rate risk bites. AFR
ANZ trimmed 2026 to −0.7% Sydney and −1.7% Melbourne, then has Melbourne (+2.9%) as the fastest-growing capital in 2027. ANZ
Sydney and Melbourne auction markets are now officially in downturn per the AFR - petrol prices and the May 5 hike the latest dampeners on thin volumes. AFR
Dexus shelved its flagship Melbourne office development on cost pressure - the second mainland-CBD office shelving this month. AFR
Cbus Property’s CEO told the AFR office buildings will get structurally smaller - even the biggest CBD occupiers will take less space. AFR
And in the “builders aren’t having a great year” column: the Sydney home of Hansen Yuncken’s CEO was firebombed overnight Wednesday. AFR
In the Boardroom
Andrew Catsoulis on what listed property can’t fund
“Private ownership does resolve a tension the listed company faced between tying up capital in a development pipeline and short-term profit.”
That’s Andrew Catsoulis, MD of National Storage REIT, in his exit interview to the AFR on Tuesday - the day his A$4B take-private to Brookfield and GIC went legally effective.
Catsoulis floated NSR in 2013 at A$280M. Twelve years later he handed the keys to private capital at fourteen times that.
The mechanism: listed REITs have to pay quarterly distributions and protect short-cycle EPS. Long development pipelines burn cash for three to five years before they monetise.
The public market discounts the development book - sometimes brutally. Private capital sees through the discount and takes the whole thing offline.This same week, GIC tapped Citi and CBRE to find a new registry partner at Iglu - the largest student-housing platform in Australia - after Macquarie Capital’s exit. AFR Street Talk
Catsoulis closed with a kicker: “When you finally line your capital up against your strategy, the strategy gets a lot quicker.”
Read the AFR’s full Catsoulis interview →
For the Data Nerds
The numbers behind the headlines
Auction Clearance - Week ending 26 April 2026
No print this week. ANZAC Day fell on a Saturday in 2026, and Domain has confirmed it will not collect Saturday 25 April results - the next national report drops 2 May.
This Week’s Numbers
Cotality HVI Chart Pack (April): Sydney–Melbourne median house gap at $517,596 (widest in 20+ years). Capital yields: Darwin 6.0%, Adelaide/Hobart 4.3%, national 3.57%, Sydney 3.1%. Cotality
ABS Government Finance Statistics (annual 2024–25): released Tuesday with Taxation Revenue. The fiscal baseline three weeks out from the 12 May Budget. ABS
On the Market
ASX Property Weekly Wrap · 21–24 April 2026
REITs
NSR (National Storage REIT) $2.86 | suspended - Scheme legally effective Tuesday; trading suspended from market close 21 April. Implementation 8 May. AFR
INA (Ingenia Communities) ~$4.10 | firm - Emerged as an interested party in Peet (PPC) per AFR Street Talk - widening land-bank optionality. AFR Street Talk
SCG (Scentre Group) ~$3.85 | firm - CEO Elliott Rusanow flagged strong sales, near-full Westfield occupancy and higher distributions ahead. AFR
DXS (Dexus) ~$7.60 | soft - Shelved its flagship Melbourne office on cost pressure. Quiet vote against the H2 office recovery thesis. AFR
Developers
MGR (Mirvac Group) ~$2.18 | soft - Q3 update reaffirmed 12.8–13.0c EPS and a 5.6% dividend lift to 9.5c, but flagged residential moderation. March alone just 281 settlements vs 1,896 for the quarter. AFR
Property Services
CHC (Charter Hall) ~$15.20 | firm - Retail REIT (CQR) declared a 6.35c quarterly distribution. Group separately secured a $1.2B property mandate (see Settlement Day). Charter Hall
Settlement Day
Major deals and M&A
Justin Hemmes’ Merivale won NSW government backing for its offer on the indebted Rose Bay RSL over Coogee Diggers’ higher AFR
Catriona Burns (Wilson Asset Management) closed on a A$20.5M Tamarama designer home. AFR
Beulah International’s failed A$2.7B STH BNK Melbourne tower - receivers fielded organised refund demands from apartment buyers under 2022–24 contracts with unusually long sunset clauses. AFR
The Zofia Kipen estate’s Toorak mansion sold to a vehicle linked to Patrick Quinlivan and Mandopop star Jay Chou. AFR
Sam Arnaout (Iris Capital) listed his Manly home this week - the latest billionaire residential trade out of Sydney’s northern beaches. AFR
River Capital’s boss listed her Toorak abode for A$11M - A$7M above the 15-year-ago purchase price. AFR
What’s Settling Next Week
Forward look
Key Watch items below are the two prints that decide whether the May 5 hike happens.
Sun 27 Apr - Cotality preliminary auction table. Sunday evening AEST drop will be the first national clearance signal after the ANZAC Day blackout. Volumes thin; methodology gap to SQM still unresolved. Cotality
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★ Key Watch Wed 29 Apr - ABS Quarterly & Monthly CPI (March quarter). The last inflation print before the 5 May RBA Board meeting. Hauser has already flagged core running near 3.5% and headline near 4. A hot read locks in a fourth hike; a soft read takes pressure off the curve. |
Thu 30 Apr - ABS Producer Price Indexes (March quarter). Build-cost inflation read - relevant for the Mirvac/Dexus “costs are crushing margin” thread. ABS
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★ Key Watch Tue 5 May - RBA Monetary Policy Board Meeting & cash-rate decision. Markets pricing roughly a 62% chance of a 25bp hike to 4.35%. With consumer sentiment at post-COVID lows and stagflation language out of the Deputy Governor’s mouth, this is the whole ball game for property values through H2. |
Social Media Fix
What the internet is arguing about
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Reddit · r/AusFinance “These 3 New Tax Changes Are Going To Hit You Hard” OP shares a 10-min explainer on the three tax changes being modelled into the 12 May Budget - CGT discount cut, negative gearing, and Div 296 super. 70+ comments in five days, with the property-investor cohort already running scenarios on what their portfolios look like under each. The thread captures the same paralysis the buyer’s agents in the AFR are describing - nobody wants to settle anything before 12 May. |
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X · @LouiChristopher “Sydney final auction results: 37.9% from 1,247 scheduled auctions.” Louis Christopher published the SQM final for last weekend’s Sydney auctions: 37.9% clearance from 1,247 scheduled. Cotality’s preliminary read for the same weekend was 55%+. The Domain–SQM gap is now wider than at any point during the post-2017 cycle - and ANZAC Day next weekend will mute the next print before things normalise. |
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