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Melbourne's apartment market in mid-2025 presents diverse opportunities for buyers and investors, with median unit prices sitting around $614,690 and strong growth potential ahead.
The Melbourne apartment market has shown resilience through challenging economic conditions, and as we reach mid-2025, prices are stabilizing with signs of recovery. Current median apartment prices range from $350,000 in outer suburbs to over $2 million for luxury penthouses in premium locations. With interest rates beginning to fall and population growth driving demand, the next few years promise steady appreciation for well-located properties.
If you want to go deeper, you can check our pack of documents related to the real estate market in Australia, based on reliable facts and data, not opinions or rumors.
Melbourne's median apartment price as of June 2025 is approximately $614,690, with strong variation by location and property type. Budget-friendly options start from $350,000 in outer suburbs, while luxury penthouses exceed $2 million in premium areas.
The market shows signs of recovery after recent challenges, with forecasts suggesting steady growth of 3-7% annually over the next five years as interest rates decline and population growth drives demand.
| Property Type | Price Range (2025) | Key Locations |
|---|---|---|
| Budget Apartments | $350,000 - $450,000 | Melton, Herne Hill, Albion |
| Mid-Range Units | $500,000 - $700,000 | Kensington, St Kilda West |
| Premium Apartments | $700,000 - $1,200,000 | Southbank, South Yarra, CBD |
| Luxury Penthouses | $1,200,000 - $3,000,000+ | Toorak, Brighton, Docklands |
| Investment Grade | $400,000 - $800,000 | Wyndham Vale, Tarneit, Craigieburn |
| Owner-Occupier | $600,000 - $900,000 | Fitzroy, Carlton, Richmond |
| Short-term Rental | $500,000 - $1,000,000 | CBD, Docklands, Near Universities |
What is the current average price of an apartment in Melbourne?
The median apartment price in Melbourne as of June 2025 sits at approximately $614,690 according to the latest market data.
This figure represents a slight recovery from earlier 2025 levels, with apartments showing resilience compared to the broader property market. The Melbourne unit market has remained relatively stable despite economic pressures from high interest rates and affordability concerns.
Recent data from property analysts shows the Melbourne apartment market has posted four consecutive months of growth through mid-2025, signaling a turnaround from the declines experienced throughout 2024. While annual growth remains marginally negative at around -2.6%, the trajectory suggests improving market conditions ahead.
Inner-city apartments command premium prices, with CBD and Southbank properties averaging around $597,000 for established units. The variation across Melbourne's apartment market is substantial, reflecting the diverse range of options available to buyers and investors.
As we reach mid-2025, market sentiment has improved following the Reserve Bank's interest rate cuts, with buyer confidence gradually returning to the Melbourne apartment sector.
How do apartment prices vary between different types of properties?
Melbourne apartment prices vary significantly based on size, location, and building quality, creating distinct market segments for different buyer categories.
Studio and one-bedroom apartments represent the entry-level segment, typically priced between $350,000 and $450,000 in outer suburbs and budget-friendly areas. In inner-city locations, one-bedroom units average around $381,000, making them attractive to first-home buyers and investors seeking affordable entry points.
Two-bedroom apartments form the largest segment of Melbourne's unit market, with prices ranging from $500,000 to $700,000 depending on location and building quality. These properties appeal to couples, small families, and investors seeking balanced rental returns and capital growth potential.
Three-bedroom apartments and larger family units command premium prices, particularly in established inner-city buildings where space is at a premium. These properties often exceed $800,000 in desirable locations and can reach $1.2 million in prestigious suburbs.
Luxury penthouses represent the top tier of Melbourne's apartment market, with prices starting from $1.5 million and extending well beyond $3 million for exceptional properties in prime locations with premium amenities and spectacular views.
Which areas have the most expensive and most affordable apartment prices?
| Price Category | Suburbs | Median Price Range |
|---|---|---|
| Most Expensive | Southbank, South Yarra, Toorak | $800,000 - $2,000,000+ |
| Premium Inner-City | CBD, Docklands, East Melbourne | $600,000 - $1,500,000 |
| Established Inner | Fitzroy, Carlton, Richmond | $550,000 - $900,000 |
| Middle Ring | Kensington, St Kilda West | $500,000 - $750,000 |
| Growth Corridors | Wyndham Vale, Tarneit, Craigieburn | $400,000 - $600,000 |
| Most Affordable | Melton, Herne Hill, Albion | $350,000 - $450,000 |
| Up-and-Coming | Sunbury, Frankston North | $380,000 - $500,000 |
How much have apartment prices changed over the past 5 years and 1 year?
Melbourne apartment price movements over recent years reflect the broader economic challenges and market adjustments following the pandemic boom period.
Over the past year to June 2025, Melbourne unit prices have declined by approximately 2.6%, reflecting the impact of high interest rates, affordability pressures, and reduced investor activity. This contrasts with the more resilient performance of other Australian capital cities during the same period.
The five-year picture tells a more complex story, with Melbourne apartments experiencing varied performance across different submarkets. Budget-friendly outer suburbs have seen growth of 12-18% over five years, while inner-city areas have shown more modest appreciation due to supply constraints and changing buyer preferences.
Established apartments in desirable inner-city locations have generally outperformed newer high-rise developments, with boutique low-rise buildings maintaining stronger value retention. The gap between apartment and house price performance has widened significantly over the five-year period.
It's something we develop in our Australia property pack.
What are the short-term, mid-term, and long-term forecasts for apartment prices?
Melbourne apartment price forecasts suggest a gradual recovery and steady growth trajectory as market conditions improve through the remainder of 2025 and beyond.
Short-term forecasts for 2025-2026 predict modest growth of 3-6%, with KPMG specifically forecasting Melbourne unit prices to grow by 7.1% in 2026. This anticipated acceleration reflects expectations of continued interest rate cuts and improving buyer sentiment following the challenging 2024 period.
Mid-term projections over five years suggest Melbourne unit prices could reach $900,000-$1,000,000 by 2030, based on average annual growth rates of 3.5-4%. This growth trajectory assumes continued population expansion, infrastructure investment, and policy support for housing development.
Long-term forecasts over the next decade indicate Melbourne apartments could exceed $1.1 million by 2035, following historical growth patterns of approximately 3.9% annually. However, these projections depend heavily on economic cycles, government policy decisions, and demographic trends.
The apartment market is expected to outperform house price growth in certain periods as affordability constraints drive buyers toward more accessible housing options.
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What are the average total costs of buying an apartment in Melbourne?
| Cost Component | Typical Range (2025) | Example ($600k Property) |
|---|---|---|
| Stamp Duty | $16,370 - $32,000+ | $25,070 |
| Legal Fees | $1,500 - $3,000 | $2,200 |
| Building/Pest Inspection | $400 - $800 | $600 |
| Lender Fees | $500 - $1,500 | $1,000 |
| Registration/Transfer Fees | $200 - $500 | $350 |
| Insurance & Moving | $1,000+ | $1,500 |
| Total Additional Costs | $20,000 - $40,000 | $30,720 |
What kind of mortgage options are available and what are typical monthly repayments?
Melbourne apartment buyers have access to a comprehensive range of mortgage products designed to suit different financial situations and investment strategies.
Fixed-rate mortgages currently start from around 5.49% per annum, while variable rates offer similar or slightly lower pricing. The recent trend of interest rate cuts has improved borrowing conditions, with further reductions expected throughout 2025.
For the average Melbourne apartment purchase of $614,690, buyers typically need a deposit of 10-20% ($61,469-$122,938). First-home buyers may access government schemes allowing deposits as low as 5% without Lenders Mortgage Insurance in some circumstances.
Monthly repayments on a $614,690 apartment with a 20% deposit ($491,752 loan) at 6% interest over 30 years would be approximately $2,946 per month. With anticipated rate cuts, this figure could reduce to around $2,700-$2,800 monthly by late 2025.
Investment property loans typically require larger deposits (20-40%) and may carry slightly higher interest rates, but offer tax benefits including negative gearing and depreciation deductions for eligible buyers.
What are the smartest areas and apartment types to invest in Melbourne right now?
Strategic apartment investment in Melbourne focuses on locations with strong fundamentals, scarcity value, and growth potential in the current market cycle.
1. **Growth Corridor Opportunities**: Wyndham Vale, Tarneit, Craigieburn, and Sunbury offer affordable entry points with rental yields up to 5.6% and strong population growth driving future demand.2. **Established Inner-City Value**: Boutique low-rise apartments in Fitzroy, Carlton, and Richmond provide scarcity value and owner-occupier appeal, positioning them for steady capital growth.3. **Infrastructure-Linked Locations**: Areas benefiting from major transport projects, including suburbs along new metro lines and upgraded rail corridors, offer enhanced connectivity and growth prospects.4. **Contrarian Opportunities**: Well-located established apartments currently trading below replacement cost present compelling value for patient investors willing to hold through the cycle.5. **Family-Friendly Segments**: Two and three-bedroom apartments in quality buildings within school zones appeal to both owner-occupiers and families seeking rental accommodation.It's something we develop in our Australia property pack.
What are the best apartment choices for different occupancy strategies?
Optimal apartment selection varies significantly based on your intended use strategy, each requiring different location and property characteristics for success.
Owner-occupier buyers should prioritize lifestyle factors, selecting boutique apartments in established suburbs like Fitzroy, Carlton, or South Yarra with excellent amenities, transport links, and community atmosphere. These areas offer long-term liveability and strong capital growth potential.
Long-term rental investment strategies benefit from apartments in high-demand rental areas with low vacancy rates, consistent tenant demand, and strong rental growth prospects. Growth corridor suburbs and established middle-ring areas typically deliver steady rental returns with minimal vacancy periods.
Short-term rental operations through platforms like Airbnb require apartments in tourist-friendly locations such as the CBD, Docklands, or near major attractions and universities. However, investors must carefully research building and council restrictions on short-term letting before purchasing.
Mixed-use strategies combining occasional owner-occupation with rental income work best in flexible locations with strong appeal to both residents and tenants, typically found in inner-city areas with excellent transport and lifestyle amenities.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are typical examples of apartment purchase prices from budget to high-end?
Melbourne's apartment market offers extensive choice across all price segments, providing options for first-home buyers through to luxury purchasers.
Budget segment apartments ($350,000-$450,000) are typically found in outer suburbs like Melton South, Herne Hill, and Albion. These properties often represent one or two-bedroom units in newer developments or established buildings, suitable for first-home buyers or entry-level investors.
Mid-range apartments ($500,000-$700,000) dominate Melbourne's market, encompassing quality two-bedroom units in suburbs like Kensington, St Kilda West, and outer CBD areas. These properties offer balanced lifestyle and investment potential with reasonable rental yields and growth prospects.
Premium apartments ($700,000-$1,200,000) include established two and three-bedroom units in prestigious inner-city areas, newer developments with premium amenities, and quality properties in blue-chip suburbs with strong owner-occupier appeal.
Luxury segment properties ($1,200,000-$3,000,000+) feature penthouses, large apartments with premium finishes, exceptional views, and exclusive amenities in Melbourne's most desirable locations including Southbank, Toorak, and premium CBD buildings.
How does Melbourne compare to other major cities for apartment costs and value?
Melbourne's apartment market positioning relative to other major cities reveals both opportunities and challenges for buyers and investors in 2025.
Compared to Sydney, Melbourne apartments offer significantly better value, with Sydney's median unit price exceeding $859,811 compared to Melbourne's $614,690. This 40% price differential provides Melbourne buyers with superior affordability and potentially stronger growth prospects as the gap narrows over time.
Brisbane's apartment market sits closer to Melbourne's pricing at around $500,000-$550,000 median, but offers stronger recent growth momentum and higher rental yields in many areas. However, Melbourne provides greater market depth, liquidity, and long-term stability.
International comparisons show Melbourne apartments remain competitive against similar global cities. Auckland's apartment market trades at similar levels, while Toronto commands premium prices that make Melbourne appear relatively affordable for international buyers.
Melbourne's advantage lies in its combination of relative affordability compared to Sydney, superior infrastructure and lifestyle amenities compared to smaller cities, and strong long-term growth fundamentals driven by population expansion and economic diversity.
What are the pros and cons of buying an apartment in Melbourne for resale profits?
Purchasing Melbourne apartments with resale intentions requires careful consideration of current market conditions, timing factors, and property selection criteria.
**Pros of Melbourne Apartment Investment:**- Current prices remain below 2022 peaks, offering countercyclical buying opportunities for patient investors- Strong population growth, infrastructure investment, and economic diversity support long-term demand fundamentals- Apartments in gentrifying or undersupplied areas may experience above-average appreciation as the market recovers- Interest rate cuts expected through 2025 should improve buyer sentiment and market activity- Relative affordability compared to Sydney creates potential for price convergence over time**Cons and Risk Factors:**- Short-term price growth may remain modest as the market adjusts to new economic conditions- Apartments have historically underperformed houses in Melbourne over extended periods- Oversupply risk exists in some high-rise precincts, particularly off-the-plan developments- Selling costs including agent fees, marketing expenses, and potential capital gains tax can significantly reduce net returns- Market timing risks remain elevated given current economic uncertaintyIt's something we develop in our Australia property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Melbourne's apartment market in mid-2025 presents a compelling opportunity for informed buyers and investors, with prices showing signs of recovery and strong fundamentals supporting future growth.
The combination of relative affordability, improving market conditions, and expected interest rate relief creates favorable conditions for strategic apartment purchases across various price segments and investment strategies.
Sources
- Property Update - Melbourne Property Investment
- OpenAgent - Melbourne Property Market
- Metropole - Melbourne Housing Market Update
- KPMG - House and Unit Price Forecasts 2025
- Urban Property Australia - Melbourne Apartment Market
- Which Real Estate Agent - Melbourne Market Update
- Your Investment Property - Melbourne Price Forecasts
- Your Mortgage - Median House Prices Australia