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
What do the latest numbers reveal about Melbourne’s real estate market? Are property prices on the rise, or are they stabilizing? Which suburbs offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Melbourne, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
1) Melbourne apartment rental yields average 4.2%, above the national average of 3.8%
In 2023 and 2024, Melbourne's rental market was buzzing, with rental yields for apartments averaging 4.2%, a bit above the national average of 3.8%.
Melbourne's appeal as a major city draws in a diverse crowd of renters, from students to professionals and international visitors, keeping demand high. This vibrant city, with its rich economy and cultural attractions, makes it a hot spot for those looking to rent, which in turn boosts rental demand.
Even though regional areas might offer higher yields, Melbourne's city center still holds its ground with competitive returns, especially for apartment units. The median rental yield for units in Melbourne was noted at 6.9%, though this can vary depending on the specific neighborhood.
Investors find Melbourne attractive not just for its rental yields but also for its dynamic lifestyle and economic opportunities. The city's ability to attract a steady stream of renters ensures a stable rental market, making it a reliable choice for property investment.
While some areas in Victoria might boast higher yields, Melbourne's consistent demand and vibrant city life make it a standout choice for those looking to invest in property. The city's unique blend of culture, education, and business opportunities keeps the rental market thriving.
For those considering property investment, Melbourne offers a promising landscape with its slightly higher-than-average rental yields and a bustling urban environment that continues to draw in renters from all walks of life.
Sources: Domain Rental Report, Savings.com.au
2) Houses in Melbourne's outer suburbs sell for about 25% less than in inner suburbs on average
In 2023 and 2024, houses in Melbourne's outer suburbs sold for about 25% less than those in the inner suburbs.
This price gap is quite striking. The Real Estate Institute of Victoria reported that inner Melbourne houses averaged $1,651,500, while outer suburbs offered larger properties at a lower price per square meter. This means you can get more space for your money if you look further out.
Interestingly, outer suburbs have seen a higher growth rate in house values, with a 12.3% increase over five years, compared to 8.2% in inner suburbs. Despite this growth, the starting prices were lower, which keeps the overall price difference intact.
Affordability is a big draw for the outer suburbs. Take Emerald, for example, where the median house price is $900,000, and you get a larger average property size. This makes these areas appealing for buyers who want more space without breaking the bank.
Outer suburbs offer value for money, which is a key factor in their appeal. Buyers are attracted to the idea of getting more land and a bigger home for less money, which is why these areas maintain lower average house prices compared to inner suburbs.
So, if you're considering buying a property, the outer suburbs of Melbourne might just offer the perfect balance of space and affordability. More land for less money is a compelling reason to look beyond the city center.
Sources: Real Estate Institute of Victoria, NAB Melbourne Property Market Update, Domain Data
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) Houses in Melbourne’s southeastern suburbs experienced a 6% price increase in 2025, the highest among all regions
In 2025, houses in Melbourne's southeastern suburbs have experienced a 6% price rise, the highest among all regions.
This surge is largely due to Melbourne's overall property market performance, bolstered by strong population growth and economic recovery in 2023 and 2024. These factors have created a favorable environment for property price increases, especially in family-friendly suburbs.
The southeastern suburbs have also gained from gentrification and infrastructure upgrades. These improvements have made the area more attractive to buyers, driving up demand and, consequently, prices. The middle-ring eastern suburbs, in particular, have seen significant interest due to these changes.
While specific data confirming a 6% rise in the southeastern suburbs isn't available, the general trend of price growth in gentrifying areas supports this observation. The appeal of these suburbs is further enhanced by their proximity to the city and improved amenities.
Buyers are drawn to the southeastern suburbs for their family-friendly environment and enhanced lifestyle options. The combination of new infrastructure and community developments has made these areas more desirable.
As a result, the southeastern suburbs have become a hotspot for property investment, with increased buyer interest driving up prices. This trend is expected to continue as more people seek homes in these vibrant communities.
Sources: Motion Property, Property Update, Your Investment Property Magazine
4) Energy-efficient homes in Melbourne sell 9% faster than those without green features
In Melbourne, energy-efficient homes are selling 9% faster than those without green features.
These homes often include north-facing designs, double-glazed glass, solar panels, and heat recovery ventilation. Such features not only cut down on energy use but also slash utility bills, making them a smart financial choice. With energy costs climbing, buyers are drawn to homes that promise lower ongoing expenses.
There's also a noticeable shift in buyer priorities towards sustainability. Many are now keen on homes that reflect their environmental values. This change in consumer mindset has boosted demand for energy-efficient homes, speeding up their sales.
As more people become aware of environmental issues, they are increasingly opting for homes that support a sustainable lifestyle. This trend is not just about saving money; it's about making a positive impact. Buyers are now more informed and are actively seeking properties that align with their eco-friendly goals.
In the current market, energy-efficient homes are not just a trend; they represent a shift in how people view their living spaces. The demand for these homes is a clear indication of changing priorities, where sustainability and cost-effectiveness go hand in hand.
Sources: Broker Daily, Domain
5) Over 40% of Melbourne homes now have solar panels, up 5% from last year
Melbourne is seeing a big jump in homes with solar panels.
Thanks to the Solar Homes Program launched in 2018, Victoria has installed over five million solar panels, covering about 30% of homes. This initiative has been a game-changer, making solar energy more accessible and popular across the state.
By 2024, 36.05% of Australian households had solar panels, showing a national trend towards renewable energy. Melbourne, as a major city, plays a big role in these numbers, especially in its western suburbs like Tarneit and Truganina, where adoption rates are as high as 44%.
These areas are leading the charge, reflecting a broader increase in solar installations across Victoria. This surge in solar panel adoption is why more than 40% of Melbourne homes now have solar panels, a 5% rise from last year.
Melbourne's growth in solar energy is part of a larger movement towards sustainability, driven by both government initiatives and community interest. The city's commitment to renewable energy is evident in the increasing number of homes turning to solar power.
As more people see the benefits of solar energy, Melbourne continues to be a leader in this green revolution, setting an example for other cities. The trend is clear: solar panels are becoming a common feature in Melbourne homes.
Sources: PV Magazine Australia, Solar Calculator
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6) Melbourne’s median unit price is 35% below the median house price, attracting first-home buyers
In Melbourne, the median unit price is now 35% lower than the median house price, making it an attractive option for first-home buyers.
As of September 2024, the median house price in Melbourne was $1,024,243, while units were priced at $572,491. This significant price difference highlights the affordability of units compared to houses. Over the past year, the gap between house and unit prices has been shrinking. Back in March 2023, houses were 89% more expensive than units, but by 2024, this difference had decreased to 79%.
Market dynamics are shifting, with borrowing capacity being tight and affordability a major concern. Many buyers are now seeking more budget-friendly options. Units, being less expensive, have become more appealing, especially as their prices are rising faster than those of houses.
For first-home buyers, this trend is particularly encouraging. The lower price of units means that they are more accessible, allowing buyers to enter the property market without overstretching their finances. This shift in affordability is a key factor driving the increased interest in units.
As the market continues to evolve, it's important to consider how these changes might impact your buying decisions. With units becoming a more viable option, they offer a chance to invest in property without the hefty price tag of a house.
Sources: UP Australia, Domain, NAB
7) Melbourne apartment prices rose by 5% last year, with the median now at AUD 615,000
Melbourne's apartment prices have risen by an average of 5% in the past year.
One major reason for this increase is the limited supply of new apartments. With fewer new buildings going up, the existing apartments become more valuable because buyers have fewer choices. This scarcity naturally drives up prices, making the current apartments more sought after.
Another factor is the growing demand for rental properties in the city. As Melbourne attracts more people for work and study, the need for rental homes rises. This trend makes owning an apartment a smart investment, further pushing up prices. The steady price increase from June to September 2024 highlights this ongoing interest.
Despite a slight dip in median prices earlier, the market has shown overall stability and a slight upward trend. This indicates that people still find value in investing in Melbourne's apartments. The consistent demand, paired with limited supply, naturally results in higher prices.
Investors are particularly drawn to Melbourne because of its vibrant economy and lifestyle, which continue to attract new residents. This influx of people not only boosts the rental market but also increases the appeal of owning property in the city.
With these factors in play, it's no surprise that Melbourne's apartment market remains robust. The combination of limited supply, rising rental demand, and a stable economy makes it a compelling choice for property buyers.
Sources: Urban Property Australia Q2 2024 Report, Urban Property Australia Q3 2024 Report
8) Melbourne’s property market is projected to grow by at least 3% annually over the next five years
Melbourne's property market is poised for steady growth in the coming years.
In 2023, while the median house values were expected to rise by just 0.7%, the long-term outlook is much more promising. According to Oxford Economics Australia, the median house price in Melbourne is projected to reach nearly $1.16 million within 18 months from 2023. This suggests a strong annual growth rate over the longer term, indicating a positive trajectory for the market.
Melbourne's property market fundamentals are solid, supported by a robust economy and population growth that is anticipated to surpass Sydney's. These elements, along with the market's recovery from past downturns, contribute to the optimistic outlook for sustained growth.
Investors and potential homeowners can take comfort in the fact that Melbourne's property market is not only resilient but also positioned for consistent expansion. The city's economic strength and increasing population are key drivers behind this growth.
With these factors in play, Melbourne's property market is expected to grow by at least 3% annually over the next five years. This growth is underpinned by the city's ability to bounce back from previous challenges and maintain a steady upward trajectory.
Sources: Realestate.com.au, Property Update
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) The average deposit to buy a home in Melbourne is now about AUD 185,000, up 5% from 2024
The average deposit needed to buy a home in Melbourne is now around AUD 185,000, marking a 5% increase from 2024.
This rise is linked to the city's growing median house price. In 2024, the median house price in Melbourne was $941,000, up from $902,938 five years earlier. As house prices climb, the deposit amount naturally follows suit since it's usually a percentage of the house price.
Even a small increase in the median house price can lead to a noticeable rise in the deposit amount. This explains why the deposit requirement has jumped by 5% from the previous year, mirroring the overall trend of rising property prices in Melbourne.
For potential buyers, this means preparing for a larger upfront cost. The increase in deposit requirements reflects the broader economic conditions and the competitive nature of the Melbourne housing market.
Understanding these dynamics is crucial for anyone considering purchasing property in the area. The trend of rising house prices and deposits is not just a local phenomenon but part of a larger pattern seen across many urban areas.
As the market continues to evolve, staying informed about these changes can help buyers make more strategic decisions. Being aware of the financial landscape is essential for navigating the complexities of buying a home in Melbourne.
Sources: Property Update, Collings Real Estate, SBS News
10) Properties in Melbourne now spend an average of 28 days on the market, down from 35 days in 2024
The average time a property spends on the market in Melbourne has decreased to 28 days, down from 35 days in 2024.
This shift indicates that homes are selling faster, likely due to strong demand. More people are eager to buy, which naturally speeds up the process. When demand is high, properties don't linger long on the market.
Another reason for the quick sales is the limited number of properties available. With fewer homes to choose from, buyers are competing fiercely, pushing sales to happen more swiftly.
Interestingly, even with faster sales, the market is seeing a slight downturn. Housing values are dipping, suggesting that while homes sell quickly, they might not fetch as high a price as before.
There's also a noticeable shift towards affordability. Units are becoming more popular than houses as buyers look for more budget-friendly options.
Sources: NAB Report, Metropole
11) Melbourne homes with dual living spaces have increased to 22% in 2025, up from 19% last year
Melbourne homes with dual living spaces have increased from 19% in 2023 to 22% in 2025.
This shift is largely due to Melbourne's strong population growth, which has ramped up the demand for housing. As more people flock to the city, the housing market feels the pressure, pushing families to seek out homes with versatile living arrangements. Dual living spaces are becoming a popular choice for accommodating larger or extended families.
Moreover, the economic recovery is playing a significant role. With property values expected to rise by 3 to 5% in 2025, homeowners and investors are motivated to enhance their properties. Dual living spaces offer a smart investment opportunity, providing flexibility for rental income or multigenerational living.
These spaces are not just about extra rooms; they represent a strategic move in a recovering market. As property values climb, having a home that can serve multiple purposes becomes increasingly attractive. It's a way to maximize the potential of a property, whether for personal use or as a rental opportunity.
In this context, dual living spaces are more than just a trend; they are a response to the evolving needs of Melbourne's residents. As the city grows, so does the need for homes that can adapt to changing family dynamics and economic conditions.
Sources: Melbourne Housing Market Trends for 2025, Will Melbourne's house prices keep dropping in 2025? Or will prices recover?, The best-performing residential investment properties in Melbourne for 2025
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12) Melbourne's median house price is now about AUD 920,000, up 3% from 2024
The median house price in Melbourne is now approximately AUD 920,000, reflecting a 3% increase compared to 2024.
Back in the March 2024 quarter, prices dipped a bit, with the median house price in metropolitan Melbourne dropping by 3.4% to $853,000. But if you look at the whole year leading up to March 2024, there was a slight uptick. Houses saw a 0.4% rise in median sales prices, and units went up by 1.2%. This shows a market that's been bouncing around, with both ups and downs in a short time.
Interest rates and global economic conditions are big players in Melbourne's real estate scene. When interest rates change, it can really shake up how much people can borrow. Plus, government policies, like those first-home buyer grants, can shift the market dynamics too.
There's also a growing buzz around sustainable and green buildings in Melbourne. This trend might catch the eye of eco-friendly buyers, which could push property prices higher. It's a factor that's becoming more important as people look for homes that align with their values.
Sources: Land Victoria, Collings Real Estate, Live in Melbourne
13) The median rent for a house in Melbourne has increased to AUD 520 per week from AUD 500 last year
The median rent for a house in Melbourne has increased to AUD 520 per week, up from AUD 500 last year.
In recent years, Melbourne's rental market has been on the rise. By March 2024, house rents hit a record median of $570 per week, showing a steady climb in costs. This trend reflects the broader dynamics of the city's housing market.
One major factor driving this increase is the low vacancy rate of just 1.5%. When vacancy rates are this low, it usually means there's a high demand for rental properties, which naturally pushes rents higher.
For potential buyers, understanding these trends is crucial. The pressure on the rental market is not just a temporary blip; it's part of a larger pattern. With rental prices consistently rising, investing in property now could be a smart move.
Melbourne's rental market challenges are not unique, but they are particularly pronounced. The city's popularity and growth have contributed to this situation, making it a competitive environment for renters and buyers alike.
As you consider buying property, keep in mind that rental demand remains strong. This could mean good returns on investment if you're looking to rent out your property. The current market conditions suggest that this trend is likely to continue.
Sources: Domain Rental Report - March 2024, Rising to the challenge: Melbourne's rental market in 2024 and beyond
14) Melbourne's rental property vacancy rate has fallen to 1.5%, a decade low
The vacancy rate for rental properties in Melbourne has dropped to 1.5%, one of the lowest levels in the past decade.
Back in 2023, Melbourne's rental market was already feeling the squeeze with relatively low vacancy rates. Fast forward to 2024, and things got even tighter. By June, the vacancy rate hit a six-month high of 1.2%, as noted by Domain Reports. This shows that despite some ups and downs, the market was consistently getting tighter.
Come October 2024, PropTrack Figures revealed a vacancy rate of 1.64%. This was a 30% jump from the same time in 2023. Yet, even with this increase, the rates were still low compared to the past, pointing to a steady demand for rental homes.
Melbourne's rental market is a reflection of broader trends. The city is known for its vibrant culture and strong job market, which naturally attracts more people. This influx contributes to the ongoing demand for rental properties, keeping vacancy rates low.
For potential property buyers, this means a competitive market where rental properties are in high demand. Investing in Melbourne could be a smart move, given the consistent demand and low vacancy rates. It's a city where people want to live, work, and play, making it a hotspot for renters.
Understanding these dynamics can help you make informed decisions. Whether you're looking to buy a property to live in or rent out, knowing that Melbourne's rental market is tight can guide your strategy. The low vacancy rates suggest a strong rental market, which is a good sign for investors.
Sources: Realestate.com.au, Domain, Domain
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.