Victoria’s Property Market: Transaction Surge Masks Soaring Holding Costs

Victoria’s Settlement Numbers Look Strong – But Are They Telling the Full Story?

Recent data from PEXA shows that Victoria, and in particular the Melbourne property market, recorded a 4.1% year-on-year increase in property sale settlements for the March 2025 quarter. On the surface, this might suggest a healthy and recovering market.

However, at Victorian Property Settlements, we believe these figures need to be read in proper context—especially when compared to Queensland and New South Wales.

Behind the Numbers: The Real Cost of Owning in Victoria

Victoria may appear to be performing well in terms of transaction numbers, but this masks a more sobering reality: the true cost of holding property in Victoria continues to spiral. Between land tax, council rates, and increasingly aggressive compliance and planning requirements—particularly in the Melbourne metro region—we are seeing more investors express concern about whether Victorian property still represents value in real terms.

In fact, the higher number of transactions may be reflective not of confidence, but of owners seeking to divest themselves of high-cost holdings, particularly in the inner and middle-ring suburbs where rental yields often struggle to keep pace with ownership expenses.

Comparing with Queensland and New South Wales

Queensland continues to lead the nation in pure transaction volume, with over 43,500 settlements in the March quarter. More importantly, the value of properties settled in Queensland has grown between 9% and 15% year-on-year—far outpacing both Victoria and New South Wales.

NSW, while more subdued in volume growth (just 0.2% year-on-year), continues to hold strong in total property value. This suggests a more resilient premium market, even as affordability pressures mount in Sydney and regional NSW.

Compared to these states, Victoria’s growth in settlement volume does not align with any corresponding surge in property values. Instead, it raises the question: are we simply churning through more stock while overall investor confidence and net returns decline?

Conclusion

As Victorian conveyancers, we welcome activity and buyer interest, but we caution our clients to look beyond the raw settlement numbers. With holding costs rising sharply and no clear path to long-term relief, we believe many current transactions reflect repositioning—sellers offloading underperforming or costly assets—rather than a vote of confidence in the market’s future.

For those looking to invest in residential property, it is essential to consider not only acquisition price but also outgoings over time. Victoria may still offer opportunities, particularly in selected growth corridors and regional areas, but careful due diligence is now more important than ever.

This is not legal advice, but general commentary provided by Victorian Property Settlements, specialists in property transfers