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
Why is Melbourne such a standout destination for real estate investment in 2025? Is it the city's robust economic growth, the vibrant cultural scene, or the relative affordability compared to other major global cities? What are the key advantages for investors?
We get asked these questions all the time because we’re on the ground, working closely with developers, real estate agents, and investors like you. With so much interest in this market, we’ve decided to turn our individual answers into a comprehensive article for everyone to benefit from.
Our goal is to provide a clear case for investing in Melbourne's real estate market, backed by our firsthand experience and market knowledge.
If you think we missed an important point in our content or want to know more, don’t hesitate to reach out (we answer super fast). Your feedback makes our content even stronger.
Finally, please note that this is not financial or investment advice. Investing in real estate carries inherent risks, and market conditions can change unexpectedly. We strongly encourage you to conduct thorough research and consult with a qualified financial advisor before making any investment decisions.
How this content was created 🔎📝
1) Melbourne’s diverse job market ensures a constant demand for rental properties
Melbourne's diverse job market is a magnet for workers needing accommodation.
With booming sectors like healthcare, education, and transport, the city is bustling with job opportunities. This growth is a beacon for people moving to Melbourne for work, and naturally, they need places to live.
Melbourne isn't just about traditional industries; it's also a tech and innovation hub that attracts multinational companies. These companies bring in international talent, which further fuels the demand for housing.
Government infrastructure projects are another piece of the puzzle, supporting economic growth and creating more jobs. This draws even more workers to the area, all of whom need somewhere to stay.
The city's population is swelling, thanks to both interstate and international migration, which adds to the housing demand. With a low unemployment rate compared to national averages, Melbourne's strong job market continues to pull in workers who need housing.
The rental market is tight, with high rents and low vacancy rates, reflecting the ongoing demand for accommodation. This makes finding a place to live a bit of a challenge, but it's a testament to the city's vibrant economy.
Sources: Victorian Government, Realestate.com.au, Indeed Hiring Lab, Victorian Government, Domain.com.au
2) With low vacancy rates, Melbourne offers strong rental demand and income potential
In 2023 and 2024, Melbourne's rental market was buzzing with activity, thanks to its low vacancy rates.
By December 2024, the vacancy rate was just 1.9%, a slight increase from the previous year but still a sign of a tight rental market. This means there aren't many empty rental properties, showing that people are eager to rent homes in the city. Even with a 60% increase from the previous year, the market remains competitive.
Historically, Melbourne has kept its vacancy rates low. For instance, in June 2024, the Central Business District saw its vacancy rate rise from 3.04% to 3.83%. Meanwhile, suburbs like Saint Albans and Werribee had smaller increases. These numbers highlight that even when vacancy rates rise, they stay relatively low, pointing to a strong demand for rental properties.
Rental prices are also on the rise, reflecting this demand. In the year leading up to June 2024, median rents in the north-east and north-west suburbs jumped by 14.3%, with areas like Jacana seeing a whopping 24.3% increase. This shows that people are willing to pay more to secure a place to live, further emphasizing the strong demand.
Melbourne's growing population is a big factor in this rental demand. The city is welcoming new residents from across Australia and internationally, which boosts the need for more rental properties. This population growth is expected to continue, supporting the rental market's strength.
Sources: Realestate.com.au, Henderson, Property Update, Property Director, Domain
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Australia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
3) Melbourne’s coastal location gives you unique opportunities for waterfront property investments
Melbourne's coastal location offers unique waterfront property investment opportunities.
In suburbs like St Andrews Beach and Sorrento, property values have soared, with St Andrews Beach seeing a 145.6% rise in prices over the past decade. This kind of growth suggests that investing here could be quite lucrative. People are flocking to these areas, drawn by the allure of the beachside lifestyle, which is making places like Dromana popular holiday destinations.
This popularity often means higher rental yields for waterfront properties, providing a steady income stream for investors. The demand for coastal living is strong, and it's not just locals who are interested. International buyers are also keen, often willing to pay a premium for the lifestyle these properties offer.
One of the reasons these properties are so attractive is the limited supply of waterfront land in Melbourne. This scarcity adds to their value, making them a hot commodity. The combination of high demand and limited supply means that these properties are likely to continue appreciating in value.
Investors looking for a solid opportunity might find Melbourne's coastal properties particularly appealing. The mix of rising property values, strong rental yields, and limited supply creates a compelling case for investment. With the right property, you could enjoy both capital growth and a reliable income stream.
Sources: The McGrath Report 2025, CoreLogic, Property Analytics
4) With Melbourne's population set to grow, you can expect steady demand for housing
Melbourne is on track to have a population of 8 million by 2050, according to the Victorian Government.
With this growth, the city will need 1.5 million more homes over the next 30 years. This means a lot of new houses, apartments, and townhouses will be popping up to keep up with the demand. Melbourne's charm and opportunities continue to attract people, making it a hotspot for new residents.
In recent years, Melbourne's population has been steadily increasing, with growth rates of 1.55% in 2024, 1.63% in 2023, and 1.78% in 2022. This trend shows that more people are choosing Melbourne as their home, which naturally boosts the need for housing. The city is also a favorite among migrants, with 667,000 new arrivals in 2023-24, adding to the housing demand.
The Victorian government is planning to build 530,000 detached houses, 480,000 apartments, and 560,000 townhouses to keep up with the growing population. This proactive strategy aims to balance the housing supply with the increasing demand. The rental market is also feeling the heat, with rates jumping over 9% for both houses and units in the past year due to limited supply and high demand.
Sources: JLL, ABS, Motion Property
5) Melbourne’s top livability scores draw in new residents, boosting housing demand
Melbourne's high livability rankings are a magnet for new residents.
In 2024, the city was celebrated as the fourth most liveable city in the world by the Economist Intelligence Unit. This isn't just a title; it's based on a mix of factors like stability, healthcare, culture, and infrastructure. Imagine living in a place where everything from education to the environment is top-notch.
Melbourne's charm is reflected in its consistent population growth. By mid-2023, the city saw a 10.65% increase, reaching 177,396 residents. This isn't just happening downtown; Greater Melbourne is also growing, with a 3.32% rise. It's like the city is expanding its arms to welcome more people.
People are flocking to Melbourne from all over. In 2023, 24.4% of movers within Australia picked Melbourne as their new home. Folks from New South Wales, Queensland, and Western Australia are packing up and heading to this vibrant city.
This influx is shaking up the property market. Even with some recent hiccups, the market's long-term outlook is strong, thanks to increasing immigration and population growth. Rental vacancies are tight, with rates climbing over 9% for both houses and units. It's a hot market, no doubt.
Sources: Time Out, Profile ID, Profile ID, Motion Property, Azura Financial
Make a profitable investment in Melbourne
Better information leads to better decisions. Save time and money. Download our guide.
6) Melbourne’s festivals and events attract visitors, increasing short-term rental demand
Melbourne's vibrant festivals and events have a huge impact on short-term rental demand.
Take the Melbourne International Comedy Festival, for instance. In 2023, it saw a 35% jump in attendance and a 72.9% boost in ticket revenue. This surge in popularity means more visitors flock to the city, all needing a place to stay.
When big events hit, hotels in Melbourne fill up fast. In October 2024, concerts by Olivia Rodrigo and Coldplay pushed hotel occupancy to 75.3%, with room rates climbing to AUD221.36 on average. When hotels are packed, visitors often turn to short-term rentals instead.
Events like the Melbourne Marathon and major concerts don't just fill rooms; they also increase revenue per available room. This means local businesses, including those offering short-term rentals, see a financial boost from the influx of visitors.
For those considering buying property in Melbourne, these events offer a unique opportunity. The city's numerous festivals and events draw visitors, boosting short-term rental demand.
Sources: Live Performance Australia, STR, HTRends
7) You can invest smartly in Melbourne’s eco-friendly properties due to its focus on sustainability
Melbourne's focus on sustainability is boosting the value of eco-friendly homes.
In 2023, there was a noticeable shift as sustainable homes received 34.7% more listing views than others. This surge was largely driven by middle-income families eager for green living, leading to these homes spending less time on the market. The Victorian Government's initiatives, like the Recycled First Policy, have been pivotal. By integrating recycled materials into construction projects such as the North Western Program Alliance, they've achieved impressive sustainability ratings, making these homes even more attractive.
Buyers are increasingly drawn to properties with green certifications. In Melbourne, these homes are not only selling faster but also fetching higher resale values. This trend underscores a strong consumer preference for energy-efficient homes. Surveys reveal that features like solar panels and rainwater tanks are catching the eye of potential buyers, further driving demand.
Government incentives have played a crucial role in this shift. By promoting sustainable building practices, they've made eco-friendly properties more appealing. The Recycled First Policy, for instance, has encouraged the use of recycled materials, enhancing the sustainability credentials of new constructions. This has led to a noticeable increase in the value and desirability of green homes.
Melbourne's real estate market is clearly responding to these changes. The demand for sustainable homes is not just a trend but a growing movement. Buyers are willing to pay a premium for properties that offer energy efficiency and environmental benefits. This is evident in the faster sales and higher resale values of green-certified homes.
As more people become aware of the benefits of sustainable living, the demand for eco-friendly properties is expected to rise. Melbourne's commitment to sustainability is not only enhancing the value of these homes but also setting a benchmark for other cities to follow.
Sources: NWPA Sustainability Report 2023, InfoChoice, Green Star News
8) Melbourne’s tech hub status draws professionals looking for homes in the area
Melbourne is a magnet for tech professionals seeking housing.
With tech giants like Fractal and Podium Australia setting up shop, job opportunities in the tech sector are booming. This influx of companies is not just about numbers; it's about creating a vibrant ecosystem that attracts talent from all over. Imagine walking into a café and overhearing conversations about the latest AI breakthroughs or blockchain innovations—this is the norm here.
Melbourne is home to over 500 FinTech companies, supported by top-notch universities and research institutions. This ensures a steady stream of skilled professionals ready to dive into the tech world. The Victorian government's investment in local startups is like adding fuel to a fire, further propelling the city's tech industry.
Globally, Melbourne shines bright, ranking third in the Global Smart Cities rankings. This isn't just a number; it's a testament to the city's forward-thinking approach and its ability to attract international tech talent. Companies like Google and Wipro have found a home here, drawn by favorable visa settings and lower business costs.
Melbourne's international presence is a key factor in its reputation as a global tech hub. The city is a melting pot of cultures and ideas, making it an exciting place for innovation. Whether you're a startup founder or a seasoned tech professional, Melbourne offers a dynamic environment to thrive.
For those considering a move, the city's tech scene is not just about work; it's about being part of a community that values innovation and collaboration. The opportunities here are vast, and the lifestyle is equally appealing, with a perfect blend of work and leisure.
Sources: PR Newswire, MVGA Industry Snapshot, Invest Victoria
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.
9) Melbourne’s booming tourism means you can easily rent out your property short-term
Melbourne's booming tourism industry is a magnet for short-term rental demand.
With its status as a top tourist spot in Australia, Melbourne draws in both international and local visitors. This influx is set to grow, as international travel to Australia is predicted to surpass pre-pandemic levels by 2025. This means more people will be looking for places to stay, boosting the need for short-term rentals.
Currently, the average occupancy rate for short-term rentals in Melbourne is 68%, showing just how popular these accommodations are. The city's charm is further amplified by its vibrant events scene, like the Melbourne International Comedy Festival, which pulls in crowds and spikes the demand for temporary stays.
Melbourne's central location is a huge plus, with easy access to must-see spots like the Great Ocean Road and Yarra Valley. This makes it a prime choice for tourists, naturally driving up the need for short-term rentals. The Victorian government is also playing its part by investing in tourism infrastructure, aiming to make the visitor experience even better.
Efforts like the Regional Tourism Investment Fund are designed to enhance what Melbourne offers, attracting even more visitors. This means more tourists will be seeking short-term accommodations, making it a hot market for property investors.
For those considering buying property in Melbourne, the city's strong tourism industry is a key factor. It not only supports but actively fuels the demand for short-term rentals, making it a potentially lucrative investment.
Sources: Hospitable, VTIC
10) Melbourne's top-notch education attracts students, making it easy to find renters
Melbourne is a magnet for students worldwide thanks to its top-notch education.
With prestigious institutions like the University of Melbourne, which is ranked as the best in Australia, the city attracts a significant number of international students. Over 83% of these students choose Australia's east coast hubs, including Melbourne, making it a bustling educational center.
Even with past challenges like stricter visa regulations, the demand for student housing in Melbourne remains strong. There's a noticeable shortage of Purpose Built Student Accommodation (PBSA), particularly near major universities such as the University of Melbourne and RMIT, offering lucrative rental opportunities for investors.
Rental prices around these universities have been on the rise. From 2018 to 2024, median rents for student accommodation studios have grown at a 6% annual rate. This increase is fueled by low vacancy rates and a steady stream of students eager for quality education.
For property investors, this means a thriving market with consistent demand for student rentals. The city's educational reputation not only draws students but also creates a vibrant rental market.
Sources: Time Out, Hotel News Resource, Study Melbourne
11) Melbourne’s vibrant sports culture boosts the appeal of properties near major events
The city's sports culture significantly boosts the appeal of nearby properties.
Take the Melbourne Cup Carnival, for example. In 2022, it brought in a whopping $422.1 million in economic benefits. Over the last decade, this event alone has contributed $3.6 billion to the local economy. Such financial activity often leads to a rise in property values in the surrounding areas.
In 2023, the Melbourne Cricket Ground (MCG) broke records with its highest-ever attendance for an AFL season, drawing in over 3 million fans. This surge of visitors likely increased property values in nearby suburbs. Areas close to major sports facilities like the MCG and Melbourne & Olympic Parks precinct saw more than $740 million in visitor spending during the 2022-23 financial year.
There's also a high demand for rental properties near these sports venues, especially during big events like the Australian Open. This demand pushes up rental prices and occupancy rates, making these areas a hot spot for property investors. Surveys show that buyers are keen on properties near sports events, eager to be part of the lively sports scene and enjoy the economic perks.
Sources: Parliament of Victoria, VRC, Domain
Get fresh and reliable information about the market in Melbourne
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
12) Melbourne’s political stability ensures a secure climate for your investment
Melbourne offers a secure investment climate thanks to its stable political environment.
Australia's political scene is known for its low risk ratings, which remain strong despite minor fluctuations. This stability is mirrored in Melbourne's consistent ranking as one of the world's most livable cities, making it a magnet for investors.
Property laws in Australia are designed to keep the market balanced. For instance, the government restricts foreign investors from buying established homes, ensuring fair competition and preventing market chaos, which is a relief for potential buyers.
Melbourne's economy is thriving, with low unemployment rates and significant investment projects. This economic vitality is a testament to the city's health and growth, making it an attractive spot for property investment.
Government initiatives in infrastructure development further bolster Melbourne's economic strength, ensuring long-term growth and stability. These efforts are crucial in maintaining the city's appeal to investors.
With a robust economy and stable regulations, Melbourne stands out as a prime location for property investment, offering a secure and promising environment for buyers.
Sources: The Global Economy, Annual Report 2023–24, Justice and Peace
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.