What is the average rent in Melbourne?

Authored by the expert who managed and guided the team behind the Australia Property Pack

Yes, the analysis of Melbourne's property market is included in our pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Melbourne. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Melbourne real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Melbourne, Sydney, and Brisbane. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What is the average rent in Melbourne right now?

As of September 2025, Melbourne's rental market shows houses averaging $575-$580 per week while units command $550-$575 per week.

The combined dwelling average sits around $655 weekly, reflecting the diverse mix of property types across Melbourne's metropolitan area. This represents a moderate increase from previous periods, with annual growth rates of 0.7% for houses and 1.7% for units.

The rental market has stabilized compared to the dramatic spikes seen in previous years, with growth now moderating as supply constraints ease slightly. Despite this moderation, Melbourne's rental prices remain elevated due to continued migration and limited housing stock.

Weekly rents have increased approximately 3-4% over the past year, a significant slowdown from the double-digit increases experienced during peak market periods. This stabilization indicates a maturing rental market adjusting to new demand levels.

How does rent differ between apartments, houses, and townhouses?

The gap between different property types has narrowed significantly in Melbourne's current rental market.

Houses command weekly rents of $575-$580, while apartments and units now closely follow at $550-$575 per week. This represents a remarkable convergence, with only a $5 weekly difference between houses and units.

Townhouses typically align with house pricing, averaging in the high $500s per week and offering a middle ground between apartment living and full house rental. The similarity in pricing reflects strong demand for all property types, particularly as affordability concerns drive renters to consider various options.

This pricing convergence represents a shift from historical patterns where houses commanded significantly higher rents. The current market reflects supply constraints across all property categories and changing renter preferences toward convenience and location over space.

What are the typical rents across different suburbs and central areas of Melbourne?

Melbourne's rental market shows significant variation based on location and proximity to the city center.

Suburb Category	Weekly Rent Range	Examples	Property Type
Premium Inner Suburbs	$850+	Kew, Doncaster East	Units
Central Areas	$550-$700	CBD, Southbank, St Kilda	Mixed
Mid-tier Suburbs	$535-$560	West Footscray, Kensington	Units
Outer/Fringe Areas	$430-$445	Craigieburn, Kingsbury	Units
Western Growth Areas	Under $450	Melton	Houses/Units
High-Yield Suburbs	Varies	Notting Hill, Carlton	Mixed
Family-Oriented Areas	$600-$800	Various suburban locations	Houses/Townhouses

How does the rent change depending on the size and surface of the property?

Property size directly correlates with rental prices across Melbourne's market.

One-bedroom units typically rent for $500-$550 per week, representing the entry point for many renters. Two-bedroom units command around $588 weekly, offering the sweet spot for couples and small families.

Three-bedroom houses average $737 per week, catering to larger families and groups. Larger properties in prime locations can exceed $800 weekly, particularly new houses with modern amenities and desirable addresses.

The rental premium for additional bedrooms reflects both space value and location factors, with central properties commanding higher per-square-meter rates than suburban equivalents. It's something we develop in our Australia property pack.

What is the full cost to the owner once you include fees, taxes, and maintenance expenses?

Property ownership in Melbourne involves substantial ongoing costs beyond mortgage payments.

Council rates vary by municipality but typically start around $2,000 annually. Land tax has increased significantly statewide, with vacant residential land tax (VRLT) adding additional burdens for unoccupied properties.

The Fire Services Levy for residential properties is rising to $136 annually. Property management fees typically consume 7% of rental income for long-term leases, while short-term rental platforms charge 15-20% of gross income.

Maintenance costs generally run 1-2% of property value annually, covering repairs, upkeep, and necessary improvements. Insurance premiums have also increased, particularly for higher-value properties in premium locations.

These combined costs often reduce gross rental yields by 2-3 percentage points, making net yields substantially lower than advertised gross figures.

How does the mortgage repayment compare with the rental income for typical properties?

Melbourne's current market heavily favors renting over buying from a cash flow perspective.

For houses with a median price of $917,000, weekly mortgage repayments reach approximately $1,099 (assuming 6% interest and 20% deposit), while rental income averages $633 weekly. This creates a significant negative cash flow of $466 weekly for property investors.

Units present a more favorable equation with weekly repayments of $723 against rental income of $566, resulting in a $157 weekly shortfall. The mortgage-to-rent ratio shows owners paying significantly more than tenants for equivalent properties.

This disparity means rental income rarely covers mortgage repayments unless investors provide larger deposits or secure lower interest rates. The current market conditions make property investment primarily a capital growth play rather than income generation.

What are the yields today across different types of properties and locations?

Melbourne's rental yields vary significantly by property type and location as of September 2025.

Units and apartments deliver the strongest yields at 4.5-4.9%, reflecting their lower purchase prices relative to rental income. Houses lag behind at 3.2-3.5% due to higher acquisition costs against comparable rental returns.

High-yield suburbs include Notting Hill at 7.7%, Carlton at 7.5%, and Melton's outer western areas achieving 5.3% for units. These areas typically offer more affordable entry points while maintaining steady rental demand.

Short-term rentals through platforms like Airbnb can achieve yields of 7.5% or higher, though the new 7.5% short-stay levy from January 2025 impacts net returns. It's something we develop in our Australia property pack.

Geographic location significantly impacts yields, with outer suburbs generally offering higher returns than inner-city premium areas where capital values are elevated.

How have rents and yields changed compared to one year ago and five years ago?

Melbourne's rental market has experienced significant evolution over recent years.

Compared to one year ago, houses show minimal growth below 1%, while units have increased 1.7%. Overall rents have risen 3-4% annually, representing a marked slowdown from previous periods of rapid growth.

Over the past five years, Melbourne experienced average annual rent growth of approximately 5%, with some periods seeing double-digit spikes during peak demand phases. Recent moderation reflects market maturation and improved supply responses.

Yields have actually improved due to tight supply conditions, even as rent growth has moderated. This improvement stems from controlled supply meeting sustained demand, particularly in the unit market where yields have strengthened most notably.

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 the forecasts for rental prices and yields over the next 1, 5, and 10 years?

Melbourne's rental market outlook shows continued growth with varying intensities across different timeframes.

Within the next year, rents are forecast to increase by $26-$196 weekly in high-migration areas, driven by continued population growth and limited new supply. This represents approximately 5-15% growth in targeted submarkets.

Five-year projections suggest house prices may climb 40-50%, potentially reaching $1.23-$1.56 million for median Melbourne houses by 2030. Rental growth is expected to continue but at more moderate rates as supply gradually improves.

Ten-year forecasts indicate yields may soften slightly as property values continue appreciating faster than rental growth. However, long-term demand remains robust, particularly for units and affordable family-sized properties in well-connected locations.

What are the vacancy rates in different parts of Melbourne, and how do they affect returns?

Melbourne maintains historically tight vacancy rates across most areas.

The overall citywide vacancy rate sits at 1.2-1.5%, well below the 3% level typically considered balanced. Suburbs like Lysterfield, Melton, and inner west/east areas often record vacancy rates below 1%.

These low vacancy rates directly support rental returns by minimizing void periods and maintaining upward pressure on rents. Landlords experience shorter marketing times and stronger negotiating positions with prospective tenants.

The tight supply situation keeps rental yields resilient even when property prices remain flat, as consistent occupancy rates ensure steady income streams. Areas with the lowest vacancy rates typically offer the most reliable rental returns for investors.

Who are the typical renter profiles right now, and what types of properties do they prefer?

Melbourne's rental market serves diverse demographic segments with distinct preferences.

1. **Young professionals and students** - Prefer central apartments and smaller units for convenience and lifestyle proximity2. **New migrants** - Typically seek affordable central locations with good transport links and community amenities 3. **Families with children** - Choose houses, townhouses, and larger suburban dwellings for space and schools4. **Empty nesters and downsizers** - Often select modern units in well-serviced suburbs with lower maintenance requirements5. **Short-term visitors and business travelers** - Favor 2-bedroom setups accommodating up to 4 guests in central or business districts

The Airbnb and short-term rental market predominantly serves couples, small families, and solo travelers, with most listings configured as 2-bedroom/4-guest arrangements. It's something we develop in our Australia property pack.

What are the smartest choices today if you want to invest for short-term rentals versus long-term leases, and how does Melbourne compare with other major cities?

Investment strategy selection depends significantly on risk tolerance and management preferences in Melbourne's current market.

For higher yields, units and apartments in affordable, well-connected suburbs offer the best returns for long-term leases. Capital growth investors should focus on houses in popular western suburbs and key infrastructure development zones.

Short-term rentals deliver higher yields, often 30-60% above long-term rates, but face increased complexity with the new 7.5% levy, higher vacancy risks, and intensive management requirements. Long-term leases provide stability with lower operational costs but reduced income potential.

Compared to Sydney and Brisbane, Melbourne offers higher yields on units, more moderate capital appreciation expectations, and better overall affordability for entry-level investors. The city's diverse economy and continued population growth support sustained rental demand across both investment strategies.

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.

Sources

1. Selectra - Average Rent in Australia
2. Domain - Melbourne Rent Research
3. Metropole - Melbourne Housing Market Update
4. SQM Research - Melbourne Weekly Rents
5. RealEstate.com.au - Melbourne Rental Prices
6. OpenAgent - Melbourne Property Market
7. Q Financial - Investment Property Guide
8. Wise - Best Rental Yields Australia
9. Your Mortgage - Renting vs Buying 2025
10. Finspective - Victorian Property Tax Changes