Melbourne and regional Victoria have been tipped for a two-year supercharged real estate recovery expected to deliver double-digit price growth. After years of flatlining, Victorian communities now dominate the list of areas around the country anticipated for a 2026 and 2027 boom, according to research by real estate analysts Hotspotting.

The municipalities of Ballarat, Greater Dandenong, Geelong, Hume, Mitchell and Yarra all made the firm’s list of top 10 Australian council areas for escalating buyer demand, a precursor to price growth. The report, based on home sales data from PropTrack, states regional Victoria boasts one of the most upwardly mobile markets in the nation.

It’s on the cusp of returning to the Covid pandemic’s “heady days”, after recording 13,299 home sales between October and December 2025, a 32 per cent increase on the 12 months prior. And the Greater Melbourne market “is one of the most compelling recovery stories in the national dataset” with 34,209 sales in the same time frame, close to its 34,878 sales f f b 2021 figure of December 2021.

Hotspotting director Terry Ryder said Victoria’s capital and its regions would likely see improved prices in the next 12 months to two years, based on positive trends in surging sales numbers, even when accounting for interest rate increases and skyrocketing petrol costs.

“Melbourne and regional Victoria have been quite dormant, but the analysis of the sales activity figure suggests that, in 2026, we’re going to see prices rising at higher rates than we have in the last few years in most Victorian markets,” he said. Mr Ryder said he was expecting Melbourne and regional Victoria to deliver double-digit median house value rises.

He added that buyers seeking affordability were driving demand in some Victorian hotspots, including for units in the Yarra suburbs of Collingwood, Fitzroy and Richmond and houses in Hume’s Sunbury, Craigieburn, Greenvale and Broadmeadows, as outlined in the Hotspotting Autumn Price Predictor Index report.

Cohen Handler Buyers Agents’ business director Zac Jacobs said soaring fuel costs and interest rate rises had caused some market disruption in the past fortnight. However, Melbourne was “absolutely a buyer’s market” at the moment, thanks to less competition at auctions and more off-market listings.

“We’ve seen in the last couple of weeks, prices of about 80 per cent of properties are selling in, or at, the lower range of expectations and that’s unusual in a market like this,” Mr Jacobs said. He said buyers seeking good capital growth should avoid CBD apartments and outer suburban house-and-land packages, due to an over-saturation of these types of listings.

It was also smart to check what was slated in suburbs the state government had earmarked for future large apartment developments, in moves to tackle the housing crisis. “Even Brighton, with potentially 12-storey apartment blocks going up, these things will affect your price growth,” Mr Jacobs said.

“Because people are moving there for the lifestyle but if they’re going to be surrounded by apartment blocks and traffic jams, they won’t want to be there anymore.” Di Battista Real Estate Craigieburn director Daniel Di Battista said there was some uncertainty in the market and sales were taking a bit longer to finalise. But, with plenty of transactions still happening, he reckoned median prices were likely to rise.

“The couples who are selling and then saying, ‘We’ll wait out it and see what happens,’ I think they’re playing with fire – I think they might get priced out in the next year or so,” Mr Di Battista said. He was seeing many buyers selling and then purchasing a new home within the same suburb or a neighbouring area of Hume. “We’re also noticing some people from the other side of town downsizing their mortgage, buying a similar house but on this side of Melbourne and then having about half their previous mortgage size,” Mr Di Battista said.