Prospects for markets across Greater Melbourne will improve as 2023 progresses.

The key factor that will drive a return to higher market activity and prices is the impact of migrants and overseas students.

And this will build on the recovery which is already under way.

International borders re-opened in 2022 and this has led to an influx of overseas migrants and students, with Melbourne a key destination for those coming to Australia.

But it takes time for this to translate into major impact on property market activity.

The first impact is on the rental market, with overseas students helping to create a sharp decrease in the vacancy rate for Melbourne.