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
If you're a foreigner thinking about buying an apartment in Melbourne for rental income, this guide breaks down what you can realistically expect in early 2026.
We cover gross yields, net yields, typical rents by bedroom count, the neighborhoods with the strongest tenant demand, and all the costs that will eat into your returns.
We constantly update this blog post to reflect the latest Melbourne rental market data.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Melbourne.
What rental yields can I realistically get from an apartment in Melbourne?
What's the average gross rental yield for apartments in Melbourne as of 2026?
As of early 2026, the estimated average gross rental yield for apartments in Melbourne sits at around 4.5%, based on advertised rents and asking prices across the city.
The realistic range for most Melbourne apartment investments falls between 3.5% and 5.5%, depending on where you buy and what type of apartment you choose.
The main factor that causes gross yields to vary significantly in Melbourne is the building's owners corporation (OC) fee structure, because two apartments at similar prices can have wildly different annual levies depending on whether the building has a pool, concierge, or ongoing cladding remediation work.
Compared to Sydney, Melbourne apartments generally offer slightly better gross yields (Sydney sits closer to 3.5% to 4%), while Brisbane and Perth often deliver higher yields in the 5% to 6% range due to lower purchase prices relative to rents.
What's the average net rental yield for apartments in Melbourne as of 2026?
As of early 2026, the estimated average net rental yield for Melbourne apartments typically lands between 2.5% and 3.2% for a standard investor setup, but this can drop to just 1% to 2% if you're classified as an absentee owner for Victorian land tax purposes.
The realistic range of net yields that most apartment investors in Melbourne can expect is 1.5% to 3.5%, with the wide spread driven mainly by ownership structure and building costs.
The single biggest expense that reduces gross yield to net yield for Melbourne apartments is not management fees or insurance, but rather the combination of owners corporation levies (which can run A$3,000 to A$8,000 or more per year in buildings with lifts, pools, or remediation issues) and Victorian land tax, especially if you're hit with the absentee owner surcharge that applies to most foreign buyers.
By the way, you will find much more detailed data in our property pack covering the real estate market in Melbourne.
What's the typical rent-to-price ratio for apartments in Melbourne in 2026?
As of early 2026, the typical rent-to-price ratio for Melbourne apartments is around 4.5%, which is simply another way of expressing the gross rental yield.
The realistic range of rent-to-price ratios that covers most Melbourne apartment transactions falls between 3.5% and 5.5%, with premium inner-city buildings often sitting at the lower end and older walk-up apartments in the middle ring at the higher end.
Apartments in Melbourne's inner-west suburbs like Footscray and Sunshine, as well as northern suburbs like Preston and Coburg, tend to have the highest rent-to-price ratios because purchase prices are more affordable while rents remain strong due to good transport links and proximity to the CBD.
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How much rent can I charge for an apartment in Melbourne?
What's the typical tenant budget range for apartments in Melbourne right now?
As of early 2026, the typical monthly tenant budget for renting an apartment in Melbourne ranges from around A$1,950 to A$3,250 per month (roughly $1,230 to $2,050 USD, or €1,130 to €1,885 EUR), depending on the number of bedrooms and location.
Tenants looking for mid-range apartments in Melbourne, such as a decent two-bedroom in the inner suburbs, typically budget between A$2,400 and A$3,000 per month (approximately $1,510 to $1,890 USD, or €1,390 to €1,740 EUR).
For high-end or luxury apartments in Melbourne, including newer buildings with premium amenities in Southbank, South Yarra, or the CBD, tenants often budget A$3,500 to A$5,000 or more per month (around $2,200 to $3,150 USD, or €2,030 to €2,900 EUR).
We have a blog article where we update the latest data about rents in Melbourne here.
What's the average monthly rent for a 1-bed apartment in Melbourne as of 2026?
As of early 2026, the estimated average monthly rent for a 1-bed apartment in Melbourne is around A$2,250 per month (approximately $1,420 USD or €1,305 EUR).
For entry-level 1-bed apartments in Melbourne, expect to charge around A$1,800 to A$2,000 per month ($1,135 to $1,260 USD, or €1,045 to €1,160 EUR), which typically gets you an older walk-up apartment in suburbs like Footscray, Preston, or the outer edges of Brunswick without building amenities.
A mid-range 1-bed apartment in Melbourne rents for around A$2,200 to A$2,500 per month ($1,385 to $1,575 USD, or €1,275 to €1,450 EUR), and this would typically be a well-maintained unit with secure entry in inner suburbs like Richmond, Fitzroy, or Carlton, often in a building with a lift.
High-end 1-bed apartments in Melbourne command A$2,800 to A$3,500 or more per month ($1,765 to $2,205 USD, or €1,625 to €2,030 EUR), and these are usually newer builds in Southbank, Docklands, or South Yarra with concierge, gym, pool, and city views.
What's the average monthly rent for a 2-bed apartment in Melbourne as of 2026?
As of early 2026, the estimated average monthly rent for a 2-bed apartment in Melbourne is around A$2,650 per month (approximately $1,670 USD or €1,535 EUR).
Entry-level 2-bed apartments in Melbourne rent for around A$2,200 to A$2,400 per month ($1,385 to $1,510 USD, or €1,275 to €1,390 EUR), which typically means an older building without a lift in suburbs like Moonee Ponds, Coburg, or Maribyrnong, often with basic finishes but functional layouts.
Mid-range 2-bed apartments in Melbourne command around A$2,600 to A$3,000 per month ($1,640 to $1,890 USD, or €1,510 to €1,740 EUR), and these are commonly found in well-located inner suburbs like Brunswick, Northcote, or St Kilda in buildings with secure parking and modern kitchens.
High-end 2-bed apartments in Melbourne fetch A$3,200 to A$4,500 or more per month ($2,015 to $2,835 USD, or €1,855 to €2,610 EUR), typically in premium towers in the CBD, Southbank, or South Yarra with harbor or city views, resort-style amenities, and high-quality finishes.
What's the average monthly rent for a 3-bed apartment in Melbourne as of 2026?
As of early 2026, the estimated average monthly rent for a 3-bed apartment in Melbourne is around A$3,250 per month (approximately $2,050 USD or €1,885 EUR).
Entry-level 3-bed apartments in Melbourne rent for around A$2,800 to A$3,100 per month ($1,765 to $1,955 USD, or €1,625 to €1,800 EUR), typically older townhouse-style apartments or walk-ups in middle-ring suburbs like West Footscray, Reservoir, or Heidelberg with basic amenities but good space.
Mid-range 3-bed apartments in Melbourne command around A$3,200 to A$3,800 per month ($2,015 to $2,395 USD, or €1,855 to €2,205 EUR), often found in family-friendly inner suburbs like Hawthorn, Kew, or Malvern in low-rise buildings with parking and outdoor space.
High-end 3-bed apartments in Melbourne fetch A$4,000 to A$6,000 or more per month ($2,520 to $3,780 USD, or €2,320 to €3,480 EUR), and these are premium penthouses or large apartments in towers along the Yarra River, in Toorak, or in the CBD with multiple bathrooms, studies, and luxury finishes.
How fast do well-priced apartments get rented in Melbourne?
In Melbourne in early 2026, well-priced apartments typically rent within 7 to 14 days, and the best-presented properties in high-demand areas can go even faster.
The vacancy rate for apartments in Melbourne currently sits in the low 1% range, which means tenant demand is strong and landlords generally don't face long empty periods between tenancies.
The main factors that cause some Melbourne apartments to rent faster than others are proximity to train stations and tram lines (Melbourne tenants prioritize public transport), access to universities like Melbourne Uni or Monash, and whether the apartment has practical features like air conditioning, a separate bedroom (not a studio), and secure entry.
And if you want to know what should be the right price, check our latest update on how much an apartment should cost in Melbourne.
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.
Which apartment type gives the best yield in Melbourne?
Which is better for yield between studios, 1-bed, 2-bed and 3-bed apartments in Melbourne as of 2026?
As of early 2026, studios and 1-bed apartments in Melbourne typically offer the best gross rental yield because their purchase prices are lower relative to the rent they can achieve.
The typical gross yield range by apartment type in Melbourne is roughly 4.5% to 5.5% for studios and 1-beds, 4% to 5% for 2-beds, and 3.5% to 4.5% for 3-beds, though these can shift significantly based on building quality and location.
The main reason smaller apartments outperform on yield in Melbourne is that the city has a large pool of students, young professionals, and singles who need affordable rentals near the CBD, universities, and hospitals, which keeps demand (and therefore rents) strong for compact living spaces.
Which features are best if you want a good yield for your apartment in Melbourne?
The features that most positively impact rental yield for Melbourne apartments are walkable access to train or tram lines, proximity to major employment and study hubs like the Parkville medical precinct or CBD, a practical floorplan with a separate bedroom and decent natural light, and crucially, being in a building with low-to-moderate owners corporation fees.
In Melbourne, mid-level floors (levels 3 to 10) tend to rent out most easily because they offer a balance between views, noise reduction from street level, and reasonable access if lifts are busy or out of service.
Apartments with balconies or outdoor space do command slightly higher rents in Melbourne, especially post-pandemic when tenants became more willing to pay a premium for private outdoor areas, though the rent increase doesn't always offset the higher purchase price of these units.
Building features like lifts, concierge, and parking can raise rents, but in Melbourne, the key question is whether the rent premium covers the higher owners corporation fees these amenities create, and often it doesn't, which is why savvy yield-focused investors sometimes prefer simpler low-rise buildings.
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Which neighborhoods give the best rental demand for apartments in Melbourne?
Which neighborhoods have the highest rental demand for apartments in Melbourne as of 2026?
As of early 2026, the Melbourne neighborhoods with the highest rental demand for apartments are the CBD, Southbank, Carlton, Fitzroy, Richmond, South Yarra, St Kilda, Brunswick, and Footscray, all of which benefit from dense jobs, universities, nightlife, and excellent public transport.
The main demand driver that makes these neighborhoods attractive to tenants in Melbourne is their proximity to major employment hubs and universities, especially the Parkville medical and university precinct (which pulls renters to Carlton and the CBD) and the creative industries cluster in Fitzroy and Collingwood.
In these high-demand Melbourne neighborhoods, vacancy rates typically sit below 1.5% and well-priced apartments often lease within one to two weeks of listing.
One emerging neighborhood gaining rental demand momentum in Melbourne is Footscray, which has transformed from a traditionally working-class area into a vibrant multicultural hub with improving infrastructure, new apartment developments, and significantly lower prices than inner-east equivalents.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Melbourne.
Which neighborhoods have the highest yields for apartments in Melbourne as of 2026?
As of early 2026, the Melbourne neighborhoods with the highest rental yields for apartments are generally in the inner-west and parts of the north, including Footscray, West Footscray, Sunshine, Preston, Coburg, and Maribyrnong.
The typical gross rental yield range in these top-yielding Melbourne neighborhoods is 5% to 6%, compared to 3.5% to 4.5% in premium inner-south areas like South Yarra or Toorak.
The main reason these neighborhoods offer higher yields than others in Melbourne is that apartment purchase prices remain relatively affordable (often A$400,000 to A$550,000 for a 2-bed) while rents have risen strongly due to improved transport links, gentrification, and spillover demand from tenants priced out of trendier suburbs closer to the CBD.
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.
Should I do long-term rental or short-term rental in Melbourne?
Is short-term rental legal for apartments in Melbourne as of 2026?
As of early 2026, short-term rental is generally legal in Victoria (including Melbourne), but there are two major restrictions that foreign apartment buyers must understand before relying on Airbnb-style income.
The main legal requirements for operating a short-term rental apartment in Melbourne are that you must pay Victoria's short stay levy (7.5% of booking revenue) on stays under 28 consecutive nights, and you must check whether your specific apartment building's owners corporation has voted to ban short stays, which has been possible since January 2025.
There is no separate state registration or licensing system for Airbnb-style rentals in Melbourne, but you must register for and remit the short stay levy through the State Revenue Office, and your building's rules can override your right to do short-term letting entirely.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Melbourne.
What's the gross yield difference short-term vs long-term in Melbourne in 2026?
As of early 2026, short-term rental in Melbourne can potentially deliver gross yields 1 to 3 percentage points higher than long-term rental in the right locations, but this advantage often shrinks significantly once you account for the additional costs.
The typical gross yield range is around 4% to 5% for long-term rental apartments in Melbourne, versus 5% to 8% for well-managed short-term rentals in tourist-friendly areas like the CBD, Southbank, or St Kilda, assuming strong occupancy.
The main additional costs that reduce the net yield advantage of short-term rentals in Melbourne are the 7.5% short stay levy, platform fees (Airbnb takes around 3%), professional cleaning between guests, furnishing costs, higher insurance premiums, more intensive management (often 15% to 25% of revenue), and the reality of seasonal vacancy gaps.
To outperform a long-term rental in Melbourne, a short-term rental typically needs to achieve at least 65% to 75% occupancy at premium nightly rates, which is achievable in prime locations but challenging in suburban areas or buildings with STR restrictions.
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What costs will eat into my net yield for an apartment in Melbourne?
What are building service charges as a % of rent in Melbourne as of 2026?
As of early 2026, typical building service charges (called owners corporation or OC fees in Melbourne) run around 10% to 15% of annual rent for standard apartment buildings, which translates to roughly A$3,000 to A$4,500 per year ($1,890 to $2,835 USD, or €1,740 to €2,610 EUR) for a typical rental apartment.
The realistic range of OC fees in Melbourne is 8% to 25% of annual rent, with lower fees (8% to 12%) for simple walk-up buildings without lifts or amenities, and higher fees (15% to 25% or more) for CBD towers with pools, gyms, concierge, and ongoing special levies.
In Melbourne specifically, the services and building features that justify higher-than-average OC fees are lift maintenance and insurance (very expensive in older towers), cladding remediation programs required after fire safety audits, 24-hour concierge, and resort-style amenities like rooftop pools and gyms that have high ongoing maintenance costs.
What annual maintenance budget should I assume for an apartment in Melbourne right now?
A sensible annual maintenance budget for a Melbourne apartment in early 2026 is around A$2,000 to A$4,000 per year ($1,260 to $2,520 USD, or €1,160 to €2,320 EUR), covering repairs and replacements inside your unit that aren't covered by the building's owners corporation.
The realistic range of annual maintenance costs in Melbourne varies from A$1,500 to A$2,500 for newer apartments in good condition, up to A$4,000 to A$6,000 or more for older units that need appliance replacements, bathroom refreshes, or flooring repairs to stay competitive in the rental market.
The most common maintenance expenses Melbourne apartment owners face are hot water system repairs or replacement (electric systems common in apartments fail regularly), air conditioning servicing and repairs (essential for tenant retention in Melbourne's variable climate), and periodic painting and carpet replacement between long-term tenancies.
What property taxes should I expect for an apartment in Melbourne as of 2026?
As of early 2026, apartment owners in Melbourne face two main property taxes: council rates (typically A$1,200 to A$2,500 per year, or $755 to $1,575 USD, €695 to €1,450 EUR, depending on the council and property value) and Victorian land tax if the property is not your principal residence.
The realistic range of total property taxes for a Melbourne apartment is A$1,500 to A$4,000 per year ($945 to $2,520 USD, or €870 to €2,320 EUR) for Australian residents, but this can jump to A$4,000 to A$10,000 or more per year for foreign buyers classified as absentee owners due to the land tax surcharge.
Council rates in Melbourne are calculated by multiplying your property's Capital Improved Value (set by the Valuer-General) by the council's rate-in-the-dollar, while land tax is based on the unimproved land value and uses progressive brackets published by the State Revenue Office.
There are limited property tax exemptions available for apartment owners in Melbourne: if the apartment is your principal place of residence, you're exempt from land tax, and some pensioners qualify for council rate concessions, but foreign investors generally don't qualify for any meaningful exemptions.
If you want to go into more details, we also have a blog article detailing all the property taxes and fees in Melbourne.
How much does landlord insurance cost for an apartment in Melbourne in 2026?
As of early 2026, typical landlord insurance for a Melbourne apartment costs around A$400 to A$700 per year ($250 to $440 USD, or €230 to €405 EUR), depending on the level of coverage and excess you choose.
The realistic range of annual landlord insurance costs in Melbourne is A$350 to A$550 for basic coverage (primarily protecting against tenant damage and loss of rent), up to A$700 to A$1,000 for comprehensive policies that include higher liability limits, contents cover for furnished rentals, and lower excess options.
What's the typical property management fee for apartments in Melbourne as of 2026?
As of early 2026, the typical property management fee for apartments in Melbourne is around 7% to 8% of gross rent (including GST), which translates to roughly A$175 to A$200 per month ($110 to $125 USD, or €100 to €115 EUR) on a typical apartment earning A$2,500 monthly rent.
The realistic range of property management fees in Melbourne is 6% to 10% of gross rent (including GST), with lower fees (6% to 7%) from high-volume agencies managing many properties, and higher fees (8% to 10%) from boutique managers offering more personalized service or managing properties in outer suburbs.
Standard property management fees in Melbourne typically include rent collection, routine inspections, coordinating maintenance, handling tenant inquiries, and managing lease renewals, but letting fees (finding new tenants), advertising costs, and lease preparation fees are usually charged separately and can add another 1 to 2 weeks of rent per new tenancy.
We made this infographic to show you how property prices in Australia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Melbourne, we always rely on the strongest methodology we can and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why It's Authoritative | How We Used It |
|---|---|---|
| Homes Victoria (DFFH) Rental Report | Official Victorian Government data from lodged rental bonds. | We used it as our anchor for what new rents look like across Melbourne. We also referenced its methodology notes to stay accurate about what "median rent" means. |
| SQM Research Weekly Rents | Long-running Australian property research firm with transparent data definitions. | We used it for near-real-time January 2026 asking rents by bedroom count. We cross-checked its figures against government and portal data for consistency. |
| SQM Research Asking Prices | Frequently updated series for advertised dwelling prices in Melbourne. | We used it to estimate typical apartment purchase prices in January 2026. We paired it with rent data to calculate gross yields. |
| Domain Rent Report (Dec 2025) | Major Australian property portal with consistent research methodology. | We used it to verify vacancy tightness and overall rent signals. We treated it as a second large dataset to triangulate our estimates. |
| State Revenue Office Victoria Land Tax | Official Victorian tax authority with definitive rate schedules. | We used it to show how land tax works and why absentee owner status reduces net yields. We built worked examples using these official tables. |
| Consumer Affairs Victoria OC Fees | Victorian regulator's plain-English guide to owners corporation levies. | We used it to explain what building service charges are in Melbourne apartments. We referenced it to justify treating OC fees as a core yield driver. |
| Consumer Affairs Victoria Short Stay Rules | Regulator guidance on owners corporation powers over short-term rentals. | We used it to explain that Melbourne buildings can ban Airbnb-style rentals. We referenced it to highlight due diligence steps for foreign buyers. |
| State Revenue Office Short Stay Levy | Official tax authority page with exact short-stay definitions and rates. | We used it to confirm what counts as short-term rental in Victoria. We quantified the levy as a cost that reduces STR yield advantage. |
| Defence Housing Australia Fee Report | Government housing provider using economics consultancy data with explicit assumptions. | We used it to anchor credible Melbourne property management fee ranges. We also used its discussion of total landlord costs versus headline fees. |
| City of Melbourne Rates Guide | Local council's official explanation of how rates are calculated. | We used it to explain the mechanics behind council rates in Melbourne. We referenced it to build realistic annual cost estimates for apartments. |
| Terri Scheer Landlord Insurance | Specialist landlord insurer with published cost benchmarks. | We used it to anchor a realistic order of magnitude for landlord insurance. We converted their daily rate claim into annual estimates for yield calculations. |
| Australian Bureau of Statistics Rental Insights | National statistics agency behind CPI rent measurements. | We used it to explain the difference between advertised rents and rents actually paid. We kept our conclusions conservative when translating listing data to investor outcomes. |
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