A recent report from the Property Investors Council of Australia (PICA) has unveiled a stark financial reality for Melbourne homeowners, revealing significant disparities in property market performance across Australia’s major cities. Titled “Melbourne’s Property Market Lost Ground While Other Capitals Surged,” the report highlights that Melbourne’s property values have grown by only 3.5% from 2022 to 2025, a stark contrast to the booming markets of Perth, Adelaide, Brisbane, and Sydney.

According to the report, Melbourne’s average property value increased from $798,881 to $827,117, a modest gain of $28,236 per dwelling. In comparison, Perth experienced a staggering 77% increase, Adelaide 54%, Brisbane 47%, and Sydney 16%. This performance gap is described as one of the most dramatic between Australian capital cities in recent history.

Ben Kingsley, PICA’s Chair, did not mince words regarding the impact of state policies on Melbourne property owners. “Melbournians who own property are being shortchanged by this current Labor Government to the tune of hundreds of thousands of dollars, and according to the Government, they think that’s fine because it’s making housing more affordable,” Kingsley stated.

The report suggests that Melbourne property owners have missed out on unrealised gains ranging from $98,000 to $590,000 per dwelling, depending on which capital city is used as a benchmark. With Greater Melbourne housing approximately 2.2 million dwellings, the cumulative loss of household wealth could potentially reach into the hundreds of billions, if not over a trillion dollars.

Kingsley further elaborated on the financial implications for property owners: “Property owners expect and plan for most of their future wealth to come from the property they own. That’s why they borrow money and pay the interest cost to get into the market. If the State Government continues to manipulate the market, these Melbournians will be significantly worse off financially compared to their counterparts in other states.”

The report identifies several state-based policy decisions as critical factors contributing to Melbourne’s underperformance. These include the COVID Debt Levy, which reduced land tax thresholds from $300,000 to $50,000, expanded vacant land taxes, short-stay levies, and over 150 rental reforms that restrict landlord flexibility. Additionally, there has been a sharp rise in total property-related taxes, levies, and charges.

These measures have reportedly led to increased investor selling activity and reduced demand from investors to enter the Melbourne market, ultimately impacting property values across the board. The report also highlights broader economic challenges facing Victoria, such as the weakest wage growth, the highest unemployment among mainland states, declining per capita output, and record state debt levels.

Kingsley painted a grim picture for homeowners planning for retirement under the current state policies. “Under the current State Government’s approach, come retirement, when they go to downsize their property, they can kiss goodbye any financial windfall — there goes a lot of the financial security they planned for and of any dreams of a holiday apartment on the Gold Coast, a new car, caravan or both,” he said.

The PICA report calls for urgent action from the Victorian Government to review its property policy settings. The organisation urges the government to restore confidence in the market, encourage investment, and ensure that Melbourne property owners are not disadvantaged compared to their counterparts in other capital cities.

As Melbourne’s property market continues to lag behind, the financial future of its homeowners hangs in the balance, with many calling for a reevaluation of the policies shaping the state’s housing landscape.