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Melbourne's property market in September 2025 presents diverse opportunities across apartments, townhouses, and houses, with prices ranging from $365,000 for inner-city apartments to over $2.6M for premium suburban houses. The market shows strong fundamentals with population growth driving demand, though buyers face higher stamp duty costs and foreign buyer surcharges of 8%.
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 property market offers apartments from $365,000 (1-bed) to $489,500 (2-bed), while houses in premium suburbs like Canterbury and South Yarra range from $1.55M to $2.6M.
The market shows steady 3-6% annual growth in top suburbs, with gross rental yields of 3.2-4.5% for apartments and 2-3% for houses in blue-chip areas.
| Property Type | Price Range | Size (sqm) | Rental Yield | Target Buyer |
|---|---|---|---|---|
| 1-Bedroom Apartment | $365,000 | 44 sqm | 4.5% | Young professionals, investors |
| 2-Bedroom Apartment | $489,500 | 59 sqm | 3.8% | Couples, small families |
| Townhouse | $650,000-$1.2M | 120-180 sqm | 3.2% | Growing families |
| House (South Yarra) | $1.55M-$2.6M | 200-400 sqm | 2.5% | Established families |
| House (Canterbury) | $1.8M-$3.2M | 250-500 sqm | 2.0% | Premium buyers |
| Budget Areas House | $450,000-$750,000 | 150-300 sqm | 4.0% | First home buyers |
| Investment Apartment | $400,000-$600,000 | 50-80 sqm | 4.2% | Property investors |
What property types are available in Melbourne and what sizes should you expect?
Melbourne offers four main property types: houses (standalone with own land), townhouses (multi-level sharing common areas), apartments (multi-story blocks with shared amenities), and units (single-level that may share walls or land).
Apartments in Melbourne are getting smaller, with new 1-bedroom apartments averaging 44 square meters and 2-bedroom apartments around 59 square meters. Older apartments tend to be more spacious.
Houses and townhouses provide significantly more space, with 2-bedroom houses averaging 120 square meters and 4-bedroom houses reaching approximately 260 square meters. Master bedrooms typically range from 12-16 square meters, while secondary bedrooms are 8-12 square meters.
Your choice should align with your lifestyle needs and budget constraints, as apartment living offers convenience and lower maintenance, while houses provide space and potential for capital growth through land ownership.
Which Melbourne suburbs rank highest for commute, schools, lifestyle, and rental demand?
South Yarra, Carlton, Flemington, and Canterbury consistently rank as Melbourne's top suburbs when balancing commute convenience, school quality, lifestyle amenities, and rental demand.
South Yarra offers vibrant cultural attractions, fast CBD access, and strong annual growth of 5.6%, making it ideal for young professionals and investors. Carlton serves as a student hub with diverse dining options and strong rental demand from university students.
Flemington provides excellent connectivity through bike paths and public transport, top-rated schools, and solid rental demand from families. Canterbury features leafy streets, prestigious schools, and family-centric amenities, though at a higher price point.
| Suburb | Commute Rating | School Quality | Lifestyle Score | Rental Demand | Weekly Rent |
|---|---|---|---|---|---|
| South Yarra | Excellent (5-10 min CBD) | Good | High (dining, culture) | Very Strong | $650+ |
| Carlton | Very Good (10-15 min) | High (near universities) | Good (student area) | Excellent | $550-650 |
| Flemington | Good (20 min CBD) | Excellent | Good (family-friendly) | Strong | $580 |
| Canterbury | Good (25 min CBD) | Outstanding | Very High (leafy, prestigious) | Moderate | $980 |
| Fitzroy | Excellent (8-12 min) | Good | Very High (trendy, artistic) | Strong | $600-750 |
| Richmond | Very Good (12-18 min) | Good | High (entertainment) | Very Strong | $580-680 |
| Hawthorn | Good (20-25 min) | Very Good | Good (quiet, family) | Moderate | $520-620 |
What are the current price ranges and price per square meter differences by property type?
Melbourne's inner suburbs like South Yarra and Canterbury command house prices between $1.55 million and $2.6 million, while apartments start from $365,000 for 1-bedroom units to $489,500 for 2-bedroom units in central locations.
Price per square meter varies significantly by property type, with apartments typically fetching $6,000-$8,500 per square meter. Houses and townhouses often show lower per-square-meter costs but require higher total investment due to larger sizes.
Townhouses sit in the middle ground between apartments and houses, offering more affordable entry points than houses while providing modern amenities and spacious living compared to apartments. Premium locations command higher per-square-meter rates regardless of property type.
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Can you provide recent sales examples in target suburbs to anchor realistic purchase prices?
As of September 2025, recent sales data shows strong investor activity in Melbourne's growth corridors, with median prices reflecting current market conditions across different property types.
In South Yarra, 2-bedroom apartments are selling between $520,000-$680,000, while townhouses range from $850,000-$1.2 million. Houses in premium streets command $1.8-$2.4 million depending on size and condition.
Canterbury shows higher price points with 3-bedroom houses selling for $1.9-$2.8 million, while quality 2-bedroom apartments achieve $580,000-$750,000. Flemington offers more accessible pricing with houses at $750,000-$1.1 million and apartments from $420,000-$580,000.
Carlton's student-focused market sees apartments selling for $380,000-$520,000, with small houses or converted properties reaching $650,000-$950,000. These figures reflect active sales in the past three months and provide realistic anchoring points for purchase decisions.
What upfront costs should you budget for, including foreign buyer surcharges?
Melbourne property purchases require budgeting for stamp duty (variable based on price and citizenship status), legal fees, inspection costs, lender expenses, and potential buyer's agent fees totaling several thousand dollars.
Foreign buyers face an additional 8% stamp duty surcharge in Victoria, plus Foreign Investment Review Board (FIRB) application fees. These surcharges significantly impact total purchase costs for non-residents.
Typical inspection and legal costs range from $2,000-$5,000, including building inspections, pest inspections, legal conveyancing, and property searches. Lender establishment fees and valuation costs add another $800-$2,500 depending on loan size.
Buyer's agent fees, if used, typically cost 1.5-2.5% of purchase price. Budget an additional 3-5% of purchase price for all upfront costs, or 11-13% if you're a foreign buyer subject to surcharges.
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How do different deposits, interest rates, and loan terms affect monthly repayments and borrowing capacity?
Standard deposits of 20% secure the best interest rates and avoid lender's mortgage insurance, while smaller deposits increase monthly costs through insurance premiums and higher interest rates.
Current interest rates in September 2025 average around 6% per annum, with loan terms typically spanning 25-30 years. A $500,000 loan at 6% over 30 years requires monthly repayments of approximately $2,997.
Larger deposits directly increase borrowing capacity by reducing loan-to-value ratios and improving lender confidence. A buyer with a $150,000 deposit can purchase up to $750,000 (with 20% deposit) compared to $600,000 with a $60,000 deposit (10% deposit plus insurance).
Variable versus fixed rate choices significantly impact repayments, with fixed rates providing payment certainty but potentially higher costs if market rates fall. Your borrowing capacity depends on income, existing debts, expenses, and deposit size.
Which options balance livability and long-term growth for owner-occupiers without overextending budgets?
Family buyers should prioritize suburbs with high school rankings, parks, and strong community infrastructure like Canterbury and South Yarra, balancing prestige with long-term capital growth potential.
Young professionals benefit from city-fringe locations offering viable commutes such as Carlton and South Yarra, where lifestyle amenities and transport connectivity support both livability and property values.
Budget-conscious buyers can consider up-and-coming areas that offer better value and growth prospects, though these may require trading off immediate prestige or rental yield for future potential.
The key is matching your budget to areas with strong fundamentals: population growth, infrastructure investment, and established amenities that support long-term value appreciation without causing financial stress through overextension.
What are the expected gross and net yields for short-term versus long-term rentals in target areas?
Melbourne apartments generate gross rental yields between 3.2-4.5%, while houses in blue-chip suburbs typically achieve 2-3% gross yields, with net yields approximately 1-2 percentage points lower after expenses.
Short-term rentals (Airbnb) can produce higher gross returns but involve variable occupancy rates, higher management costs, and additional insurance and compliance requirements that may offset the yield advantage.
Long-term rentals offer stable income streams with easier management and lower operational costs, making them more suitable for passive investors seeking consistent returns near universities or major transport hubs.
| Area | Property Type | Long-term Yield | Short-term Yield | Management Difficulty |
|---|---|---|---|---|
| South Yarra | Apartment | 3.5% | 5.2% | Medium |
| Carlton | Apartment | 4.2% | 6.1% | High (student area) |
| Flemington | House | 2.6% | 4.8% | Low |
| Canterbury | House | 2.0% | 4.2% | Low |
| CBD | Apartment | 4.0% | 7.5% | Very High |
| Richmond | Townhouse | 3.8% | 5.9% | Medium |
| Fitzroy | Apartment | 4.1% | 6.8% | High |
Which suburbs and property types show the strongest renovation and resale margins?
South Yarra and Carlton demonstrate the strongest flip potential due to high population growth, supply constraints, and strong buyer demand from both owner-occupiers and investors.
Two-story homes and modern townhouses in growth corridors typically provide the best renovation margins, as buyers pay premiums for move-in-ready properties with contemporary finishes and layouts.
Up-and-coming suburbs offer more affordable entry points with higher risk-reward profiles, particularly for buyers willing to undertake substantial renovations in areas experiencing gentrification or infrastructure investment.
The most profitable renovation projects focus on kitchen and bathroom upgrades, adding bedrooms or bathrooms, and improving outdoor spaces, with typical returns of 70-120% of renovation costs in well-located properties.
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.
Where are the most expensive, up-and-coming, and budget-friendly areas, and what trade-offs come with each?
Canterbury and South Yarra represent Melbourne's most expensive areas, featuring historic homes, elite schools, and established prestige, but requiring significant capital investment and offering lower rental yields.
Up-and-coming areas in Melbourne's north and west corridors provide better price growth potential and more accessible entry points, with trade-offs in current amenities and longer commute times to the CBD.
Budget-friendly areas on Melbourne's outskirts offer new townhouses and units at lower price points, but buyers sacrifice proximity to established amenities, schools, and employment centers.
1. **Most Expensive Areas (Trade-offs: High entry cost, lower yields)** - Canterbury: $1.8M-$3.2M houses, prestigious schools, low 2.0% yields - South Yarra: $1.55M-$2.6M houses, cultural lifestyle, moderate 3.5% yields - Toorak: $2.5M+ houses, ultimate prestige, very low yields - Brighton: $2M-$4M houses, beachside premium, seasonal rental patterns - Hawthorn: $1.2M-$2.2M houses, established families, moderate growth2. **Up-and-Coming Areas (Trade-offs: Higher risk, development potential)** - Footscray: $650K-$950K houses, gentrification underway, improving infrastructure - Coburg: $750K-$1.1M houses, young professionals moving in, good growth - Brunswick: $900K-$1.4M houses, creative community, strong rental demand - Northcote: $850K-$1.3M houses, trendy dining scene, transport improvements - Preston: $700K-$1M houses, affordable proximity, infrastructure investment3. **Budget-Friendly Areas (Trade-offs: Distance, amenities)** - Melton: $450K-$650K houses, first home buyers, long commute - Pakenham: $500K-$750K houses, new developments, limited current amenities - Werribee: $480K-$720K houses, growing infrastructure, distance to city - Craigieburn: $520K-$780K houses, family-oriented, developing transport - Officer: $550K-$800K houses, new estates, future rail connectionsHow have prices moved versus one year and five years ago, and what's the outlook?
Melbourne's property market shows steady growth of 3-6% annually in top suburbs over the past year, with inner-city apartments lagging due to oversupply issues from previous development cycles.
Five-year trends reveal Melbourne houses have appreciated 25-35% in premium suburbs, while apartments have grown 15-25% depending on location and building quality. Canterbury and South Yarra lead growth statistics consistently.
The 1-year outlook suggests continued moderate growth driven by population increases and supply constraints, with infrastructure projects supporting outer suburban growth. Interest rate movements will significantly impact buyer capacity and market activity.
The 5-10 year outlook remains positive due to Melbourne's population growth trajectory and major infrastructure investments, with family-centric suburbs likely to outperform due to demographic trends and limited land supply.
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How do Melbourne's prices, yields, and growth prospects compare with Sydney, Brisbane, and Auckland?
Melbourne maintains lower property prices than Sydney while offering similar rental yields to Brisbane, making it an attractive middle-ground option for property investors seeking balance between affordability and returns.
Melbourne typically outpaces Brisbane in capital growth rates while remaining more affordable than Sydney's premium markets, with stronger rental demand fundamentals than Auckland's current market conditions.
Sydney commands 20-40% higher prices for comparable properties but offers similar long-term growth prospects, while Brisbane provides higher rental yields but slower capital appreciation in many areas.
Auckland shows slower yield and growth performance compared to Melbourne's best-performing areas, with Melbourne's population growth and economic diversity providing more stable investment fundamentals across multiple property types and price points.
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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 property market in September 2025 offers diverse opportunities across all budget ranges, from $365,000 apartments to $3.2M premium houses.
Success depends on matching your budget, lifestyle needs, and investment goals with the right suburb and property type, while carefully considering all upfront costs and ongoing financial commitments.
Sources
- Real Estate - Property Type Differences
- Real Estate - Investment Property Types
- Oliver Hume - Melbourne Apartment Sizes
- Everlend - Most Liveable Melbourne Suburbs
- Trusted Tradie Network - House Dimensions
- AUM Global - Top Melbourne Suburbs 2025
- Real Estate - Melbourne Building Costs
- HTA - Property Types Pros and Cons