The Victorian property market is signaling a decisive shift for 2026, presenting a lucrative landscape for developers and agencies ready to meet rising demand. With unit market growth now outpacing houses across much of the state, the window is open for medium-density projects to drive the next phase of the property cycle.
For Axtra Property, a leading Melbourne-based master property agency, the current data serves as a blueprint for development success. The agency identifies this "structural shift" in buyer behavior as a key indicator that the market is ripe for diverse development projects, provided the strategy aligns with evolving buyer needs.
The Shift to Medium-Density Dominance
The narrative of the detached house being the sole driver of capital growth is evolving. Recent data from the Real Estate Institute of Victoria reveals that in the final quarter of 2025, the median price of Melbourne units rose 2 per cent to $656,500, outperforming the 1.8 per cent growth seen in houses.
This trend was even more robust in regional Victoria, where units—encompassing apartments, townhouses, and villas—surged by 5 per cent.
"The data confirms that affordability is reshaping the Victorian dream," says a spokesperson for Axtra Property. "For our developer partners, this indicates that demand is not limited to a specific postcode. There is a statewide appetite for high-quality medium-density living. The opportunity lies in delivering supply that meets this price-conscious but quality-driven market."
Widespread Growth: Validating Development Across the Board
The market resurgence is not isolated to the CBD. Significant growth has been recorded in diverse locations, validating the potential for development across inner, middle, and outer rings.
- Murrumbeena recorded a staggering 50 per cent growth in median unit price.
- Abbotsford saw values surge by 34.1 per cent.
For Axtra Property, these figures demonstrate that there are no "unsuitable" areas for development, only untapped opportunities. Whether in established blue-chip suburbs or emerging outer-ring growth corridors, the demand for units is present. Axtra’s role as a master agency is to provide developers with the sales logic and product positioning required to unlock the potential of any given site.
Bridging the Feasibility Gap
While the demand is clear, the industry acknowledges the challenges regarding construction costs and project feasibility. However, the rising price of established units is a positive indicator for the primary market. As the gap between established prices and new-build costs narrows, consumer tolerance for new project pricing increases.
Axtra Property assists developers in navigating this environment by:
- Optimizing Product Mix: Consulting on unit configurations (e.g., larger floorplans for owner-occupiers) to maximize price-per-square-meter.
- Strategic Pricing: Leveraging real-time market data to set price points that ensure sales velocity without leaving money on the table.
- Targeting the Right Demographic: With investors currently cautious, Axtra advises developers to tailor projects toward the surging First Home Buyer (FHB) demographic, who are driving the unit market due to affordability constraints.
A Forward-Looking Strategy for 2026
Experts forecast that the "structural shift" toward apartment living will accelerate through 2026. This is not merely a trend but a necessity driven by affordability and lifestyle changes.
"The industry needs to move beyond asking where to build, and focus on what to build," the Axtra Property team affirms. "With unit values rising, confidence is returning to medium-density supply providers. We are seeing a growing acceptance of apartment living that supports bullish development strategies."
As the market prepares for a strong 2026, Axtra Property stands ready to partner with developers and agencies. By combining deep market intelligence with a master agency’s robust sales network, Axtra ensures that new projects are not just built, but are successfully connected with the buyers waiting for them.