
The myth of "cheap" Melbourne property: smaller houses, apartments & smaller blocks make the median price look lower vs. what you're actually getting
Note I am not doing this to 'offend' anyone from Melbourne, I've lived there myself and it has plenty of positives, this is looking at it purely from a financial perspective.
Melbourne constantly gets talked about as if it has become the "cheap" Australian capital, especially compared with Brisbane, Adelaide, etc (Sydney is obviously cooked)... but data shows a lot of that is basically 'housing shrinkflation'.
Melbourne has increasingly become the Australian leader in selling you less house, smaller apartments and less land (and further away from the CBD) for that lower headline price.
The typical Melbourne greenfield block has fallen from around 400m² in 2020 to about 361m² as of 2025 (https://www.realestate.com.au/news/revealed-the-shocking-reality-of-australias-shrinking-house-blocks/). The top-selling block size is now reportedly around 275m² as well.
A $750k house on 350m² isn't necessarily a "better deal" than an $850k house on 500m² just because the first one has the lower sticker price. It's like two shops selling Coke but one sells 1L Coke bottles & the other sells 1.25L bottles and everyone praising how much 'cheaper' the first shop is.
Domain also released a report on this, where you can compare directly, e.g (note this data is from mid-2024 but they haven't released an update since):
Houses
| Houses | Melbourne | Brisbane |
|---|---|---|
| Median house price | $981,492 | $819,351 |
| Median land size | 534m² | 611m² |
| Price per m² | $1,838 | $1,341 |
Units
| Units | Melbourne | Brisbane |
|---|---|---|
| Median unit price | $557,308 | $570,894 |
| Median floor area | 76m² | 102m² |
| Price per m² | $7,333 | $5,597 |
Now, not saying anyone necessarily "needs" a bigger property/more land/big apartment, but it's also typically land/size of property that accumulates in value and builds wealth over time so from a purely financial perspective that needs to be factored in.