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
Understanding Melbourne rental prices in 2026 is essential whether you're a landlord, tenant, or investor looking to make smart decisions in Australia's second-largest city.
We constantly update this blog post to give you the freshest rental data and trends for Melbourne's property market.
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.
Insights
- Melbourne apartment rents in 2026 are growing at just 3% to 4% year-over-year, a sharp slowdown compared to the double-digit surges seen in 2022 and 2023.
- The vacancy rate in Melbourne sits around 2.5% in January 2026, which is slightly looser than the sub-2% tightness of peak pandemic years but still favors landlords.
- Rentals in Melbourne typically stay listed for about 20 days, meaning well-priced properties still move quickly despite the market cooling.
- Toorak and South Yarra remain Melbourne's most expensive suburbs for house rentals, with 3-bedroom homes often exceeding AUD 1,200 per week.
- Furnished apartments in Melbourne's CBD and Docklands command a premium of roughly AUD 50 to 100 per week over unfurnished equivalents.
- Young professionals in Melbourne are clustering in Fitzroy, Collingwood, and Richmond, where walkability and nightlife drive high demand for 1-bedroom flats.
- Parkville and Carlton near the University of Melbourne see rental listings disappear in under two weeks during semester start periods.
- Council rates in Melbourne typically run between AUD 1,600 and AUD 2,400 per year, with increases capped by Victoria's rate-capping framework.
- Land tax in Victoria is calculated on total landholdings, so landlords with multiple properties face progressively higher bills.
- Landlords in Melbourne usually pay water service charges while tenants cover usage, a split that is clearly defined under Victorian rental rules.
What are typical rents in Melbourne as of 2026?
What's the average monthly rent for a studio in Melbourne as of 2026?
As of early 2026, the average monthly rent for a studio apartment in Melbourne is around AUD 1,950 (approximately USD 1,250 or EUR 1,150).
Most studios in Melbourne rent within a range of AUD 1,600 to AUD 2,300 per month (roughly USD 1,020 to USD 1,470, or EUR 940 to EUR 1,350), depending on location and condition.
The main factors that cause studio rents to vary in Melbourne include proximity to the CBD, building age, and whether the property includes amenities like a gym or concierge service.
What's the average monthly rent for a 1-bedroom in Melbourne as of 2026?
As of early 2026, the average monthly rent for a 1-bedroom apartment in Melbourne is around AUD 2,230 (approximately USD 1,430 or EUR 1,310).
Most 1-bedroom apartments in Melbourne rent within a range of AUD 1,800 to AUD 2,700 per month (roughly USD 1,150 to USD 1,730, or EUR 1,060 to EUR 1,590), depending on the suburb and building quality.
Neighborhoods like Clayton and the outer west tend to have the cheapest 1-bedroom rents in Melbourne, while Southbank, Docklands, and the CBD sit at the highest end of the market.
What's the average monthly rent for a 2-bedroom in Melbourne as of 2026?
As of early 2026, the average monthly rent for a 2-bedroom apartment in Melbourne is around AUD 2,690 (approximately USD 1,720 or EUR 1,580).
Most 2-bedroom apartments in Melbourne rent within a range of AUD 2,200 to AUD 3,400 per month (roughly USD 1,410 to USD 2,180, or EUR 1,290 to EUR 2,000), with significant variation based on location.
Suburbs like Werribee and Dandenong offer the cheapest 2-bedroom rents in Melbourne, while Toorak, South Yarra, and Brighton consistently rank as the most expensive areas for this apartment size.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Melbourne.
What's the average rent per square meter in Melbourne as of 2026?
As of early 2026, the average rent per square meter in Melbourne is approximately AUD 45 per month (around USD 29 or EUR 26).
Rent per square meter in Melbourne typically ranges from AUD 40 to AUD 56 per month (roughly USD 26 to USD 36, or EUR 24 to EUR 33), with smaller inner-city apartments commanding higher rates per square meter.
Compared to Sydney, where rents per square meter often exceed AUD 55, Melbourne remains slightly more affordable, though both cities rank among Australia's priciest rental markets.
Property characteristics that push rent per square meter above average in Melbourne include CBD location, newer construction, premium finishes, and building amenities like pools and gyms.
How much have rents changed year-over-year in Melbourne in 2026?
As of early 2026, Melbourne apartment rents have increased by approximately 3% to 4% year-over-year, while house rents have grown by just 1% to 2%.
The main factors driving rent changes in Melbourne this year include easing vacancy rates, a surge in new apartment completions, and moderating overseas migration compared to the 2023 peak.
This year's rent growth in Melbourne is significantly slower than the 8% to 12% annual increases seen in 2022 and 2023, signaling a return to more normal market conditions.
What's the outlook for rent growth in Melbourne in 2026?
As of early 2026, projected rent growth in Melbourne for the year sits at 0% to 3%, reflecting a market that has largely stabilized after years of rapid increases.
Key factors likely to influence Melbourne rent growth in 2026 include international student arrivals, new dwelling completions, and interest rate movements that affect landlord costs.
Inner-city apartment markets in suburbs like Southbank, Docklands, and Carlton are expected to see the strongest rent growth if overseas migration surprises to the upside.
Risks that could cause Melbourne rent growth to differ from projections include a sharper-than-expected economic slowdown, changes to visa policies, or a surge in new housing supply coming online.
We have made this infographic to give you a quick and clear snapshot of the property market in Australia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which neighborhoods rent best in Melbourne as of 2026?
Which neighborhoods have the highest rents in Melbourne as of 2026?
As of early 2026, the three neighborhoods with the highest average rents in Melbourne are Toorak, South Yarra, and Brighton, where 3-bedroom houses often exceed AUD 5,200 per month (approximately USD 3,330 or EUR 3,060).
These Melbourne suburbs command premium rents because of their prestigious addresses, tree-lined streets, proximity to top private schools, and excellent access to the CBD.
The tenant profile in these high-rent Melbourne neighborhoods typically includes established professionals, senior executives, and affluent families seeking large homes with gardens.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Melbourne.
Where do young professionals prefer to rent in Melbourne right now?
The top three neighborhoods where young professionals prefer to rent in Melbourne are Fitzroy, Collingwood, and Richmond, all known for their vibrant lifestyle and easy CBD access.
Young professionals in these Melbourne suburbs typically pay between AUD 2,000 and AUD 2,600 per month (roughly USD 1,280 to USD 1,670, or EUR 1,180 to EUR 1,530) for a 1-bedroom apartment.
Specific amenities attracting young professionals to these neighborhoods include rooftop bars, boutique cafes, cycling infrastructure, and proximity to major employers in the CBD and inner city.
By the way, you will find a detailed tenant analysis in our property pack covering the real estate market in Melbourne.
Where do families prefer to rent in Melbourne right now?
The top three neighborhoods where families prefer to rent in Melbourne are Camberwell, Brighton, and Glen Waverley, all offering good schools, parks, and family-sized homes.
Families in these Melbourne suburbs typically pay between AUD 3,000 and AUD 4,500 per month (roughly USD 1,920 to USD 2,880, or EUR 1,770 to EUR 2,650) for a 3-bedroom house.
Specific features making these neighborhoods attractive to families in Melbourne include quiet streets, established gardens, access to public and private schools, and strong local community facilities.
Top-rated schools near these family-friendly Melbourne neighborhoods include Camberwell Grammar, Brighton Grammar, and Glen Waverley Secondary College, which are major drawcards for renting families.
Which areas near transit or universities rent faster in Melbourne in 2026?
As of early 2026, the top three areas near transit or universities that rent fastest in Melbourne are Parkville (near University of Melbourne), Clayton (near Monash University), and the CBD (near RMIT).
Properties in these high-demand Melbourne areas typically stay listed for just 10 to 16 days, well below the metro average of around 20 days.
The typical rent premium for properties within walking distance of transit or universities in Melbourne is around AUD 50 to AUD 100 per week (roughly USD 32 to USD 64, or EUR 29 to EUR 59) compared to similar properties further out.
Which neighborhoods are most popular with expats in Melbourne right now?
The top three neighborhoods most popular with expats in Melbourne are the CBD, Southbank, and St Kilda Road corridor, all offering convenience and modern apartment stock.
Expats in these Melbourne neighborhoods typically pay between AUD 2,400 and AUD 3,200 per month (roughly USD 1,540 to USD 2,050, or EUR 1,410 to EUR 1,880) for a 1 to 2-bedroom apartment.
Specific features making these neighborhoods attractive to expats in Melbourne include walkability, proximity to international employers, easy public transport, and access to services in multiple languages.
Nationalities most represented in these Melbourne expat neighborhoods include Indian, Chinese, British, and American professionals, many working in finance, tech, and professional services.
And if you are also an expat, you may want to read our exhaustive guide for expats in Melbourne.
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.
Who rents, and what do tenants want in Melbourne right now?
What tenant profiles dominate rentals in Melbourne?
The top three tenant profiles that dominate the rental market in Melbourne are young professionals, students, and families, each with distinct housing needs.
Young professionals represent roughly 35% of Melbourne's rental demand, students account for about 25%, and families make up around 20%, with the remainder split among expats and retirees.
Young professionals in Melbourne typically seek 1-bedroom apartments in inner suburbs, students look for studios or shared housing near universities, and families prefer 3 to 4-bedroom houses in school catchment areas.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Melbourne.
Do tenants prefer furnished or unfurnished in Melbourne?
In Melbourne, approximately 80% of tenants prefer unfurnished rentals, while only about 20% seek furnished apartments, mostly in specific submarkets.
The typical rent premium for furnished apartments in Melbourne is around AUD 200 to AUD 400 per month (roughly USD 130 to USD 260, or EUR 120 to EUR 235) compared to unfurnished equivalents.
Tenant profiles that tend to prefer furnished rentals in Melbourne include expats on short-term assignments, international students arriving without belongings, and corporate relocations.
Which amenities increase rent the most in Melbourne?
The top five amenities that increase rent the most in Melbourne are secure parking, air conditioning, in-unit laundry, dishwashers, and building facilities like gyms or pools.
Secure parking in inner Melbourne adds roughly AUD 200 to AUD 350 per month (around USD 130 to USD 225, or EUR 120 to EUR 205), while air conditioning adds about AUD 40 to AUD 80 per month (USD 26 to USD 51, or EUR 24 to EUR 47) to the rent.
In our property pack covering the real estate market in Melbourne, we cover what are the best investments a landlord can make.
What renovations get the best ROI for rentals in Melbourne?
The top five renovations that get the best ROI for rental properties in Melbourne are fresh paint, modern flooring, updated kitchens, efficient heating and cooling systems, and bathroom refreshes.
Fresh paint typically costs AUD 2,000 to AUD 5,000 (roughly USD 1,280 to USD 3,200, or EUR 1,180 to EUR 2,940) and can add AUD 20 to AUD 50 per week to Melbourne rents, while a kitchen update costing AUD 10,000 to AUD 20,000 (USD 6,400 to USD 12,800, or EUR 5,880 to EUR 11,770) may add AUD 40 to AUD 80 per week.
Renovations that tend to have poor ROI and should be avoided by Melbourne landlords include luxury fixtures, swimming pools, and high-end landscaping, which rarely translate into proportionally higher rents.
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.
How strong is rental demand in Melbourne as of 2026?
What's the vacancy rate for rentals in Melbourne as of 2026?
As of early 2026, the vacancy rate for rental properties in metropolitan Melbourne is approximately 2.5%, reflecting a market that has eased slightly from peak tightness.
Vacancy rates across different Melbourne neighborhoods range from around 1.5% in high-demand inner suburbs to over 3.5% in some outer growth corridors with new apartment supply.
The current Melbourne vacancy rate of 2.5% is above the sub-2% levels seen during the tightest pandemic-era conditions but remains below the 3% to 4% historical average for a balanced market.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Melbourne.
How many days do rentals stay listed in Melbourne as of 2026?
As of early 2026, rentals in Melbourne stay listed for an average of approximately 20 days before being leased.
Days on market across Melbourne range from around 12 to 16 days for well-priced inner-city apartments to 25 to 30 days for houses in outer suburbs or properties priced above market expectations.
The current days-on-market figure in Melbourne is roughly similar to one year ago, reflecting stable demand conditions rather than the frantic pace seen during the 2022 to 2023 rental surge.
Which months have peak tenant demand in Melbourne?
The peak months for tenant demand in Melbourne are late January through March and late June through August, driven by university semesters and job market cycles.
Specific factors driving seasonal demand patterns in Melbourne include international student arrivals before Semester 1 and Semester 2, graduate job starts in February, and mid-year corporate relocations.
The months with the lowest tenant demand in Melbourne are typically April to May and September to early November, when fewer leases turn over and competition among tenants eases.
Buying real estate in Melbourne can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
What will my monthly costs be in Melbourne as of 2026?
What property taxes should landlords expect in Melbourne as of 2026?
As of early 2026, landlords in Melbourne should expect to pay approximately AUD 1,600 to AUD 2,400 per year in council rates (roughly USD 1,020 to USD 1,540, or EUR 940 to EUR 1,410) for a typical investment property.
The realistic low-to-high range of annual property taxes in Melbourne extends from around AUD 1,200 for modest outer-suburb properties to over AUD 4,000 (USD 2,560 or EUR 2,350) for premium inner-city holdings, depending on valuation and council.
Council rates in Melbourne are calculated by multiplying the property's capital improved value by a rate in the dollar set by each local council, with annual increases generally constrained by Victoria's rate-capping framework.
Please note that, in our property pack covering the real estate market in Melbourne, we cover what exemptions or deductions may be available to reduce property taxes for landlords.
What maintenance budget per year is realistic in Melbourne right now?
A realistic annual maintenance budget for a typical rental property in Melbourne is approximately AUD 2,500 to AUD 4,000 (roughly USD 1,600 to USD 2,560, or EUR 1,470 to EUR 2,350) for apartments, and AUD 3,500 to AUD 6,000 (USD 2,240 to USD 3,840, or EUR 2,060 to EUR 3,530) for houses.
The realistic low-to-high range of annual maintenance costs in Melbourne extends from around AUD 1,500 for newer apartments in good condition to over AUD 8,000 (USD 5,120 or EUR 4,710) for older houses requiring frequent repairs.
Landlords in Melbourne typically set aside around 5% to 10% of their annual rental income for maintenance, which aligns with industry norms and ATO expectations for deductible repairs.
What utilities do landlords often pay in Melbourne right now?
The utilities Melbourne landlords most commonly pay on behalf of tenants are water service charges and, in some apartment buildings, owners corporation fees that bundle common-area utilities.
Water service charges in Melbourne typically cost landlords around AUD 15 to AUD 30 per month (roughly USD 10 to USD 19, or EUR 9 to EUR 18), while owners corporation levies can add AUD 200 to AUD 500 per month (USD 130 to USD 320, or EUR 120 to EUR 295) depending on building amenities.
The common practice in Melbourne is for tenants to pay electricity, gas, and water usage directly, while landlords cover fixed service charges and any building-wide levies, as defined by Victorian rental rules.
How is rental income taxed in Melbourne as of 2026?
As of early 2026, rental income in Melbourne is taxed at the landlord's marginal income tax rate, which ranges from 0% for low earners up to 45% plus the 2% Medicare levy for high earners.
Main deductions Melbourne landlords can claim against rental income include mortgage interest, property management fees, repairs, insurance, depreciation on fixtures, and council rates.
A common tax mistake Melbourne landlords should avoid is confusing repairs (immediately deductible) with improvements (capital works depreciated over time), which is a distinction the ATO enforces strictly in Victoria.
We cover these mistakes, among others, in our list of risks and pitfalls people face when buying property in Melbourne.
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 Rental Report | It's the Victorian government's official housing department publishing statewide rental market statistics. | We used it as the official anchor for metropolitan Melbourne rents and the rent index. We also used its definitions to keep bond-based and advertised-rent numbers comparable. |
| Homes Victoria Rental Tables (Excel) | It's the underlying official dataset behind the Victorian government's rental report. | We used it to pull bedroom-level medians for 1-bed and 2-bed flats and to check changes over time. We also used it to avoid relying on a single private listing portal. |
| Homes Victoria Suburb Rent Data (Excel) | It's a government dataset built from Victoria's bond and tenancy lodgements, broken down to suburb level. | We used it to identify which Melbourne suburbs sit at the top end of rents by property type. We also used it to support neighborhood rankings with verifiable numbers. |
| Domain Rent Report (September 2025) | Domain is a long-running national property portal with a well-known quarterly research program. | We used it to benchmark advertised rents for Melbourne houses versus units and annual change rates. We also used it to sanity-check the government bond-based medians. |
| Domain Melbourne Rents Insight | It's Domain's research commentary that explicitly ties back to their published Rent Report dataset. | We used it to reinforce the "growth has cooled" narrative for Melbourne rents heading into 2026. We used it as a cross-check against PropTrack and the Victorian government series. |
| PropTrack via REA | PropTrack is a major housing data provider inside REA Group, one of Australia's largest property platforms. | We used it to anchor late-2024 and early-2025 medians for Melbourne houses and units and the annual change figure. We then used that as one leg of our 2026 triangulation. |
| REA Group Rental Affordability Report 2025 | It's a national, methodology-driven research report from REA Group that compiles broad rental indicators. | We used it to support the direction-of-travel: easing conditions compared with peak tightness but still difficult affordability. We also used it for our 2026 outlook framing. |
| REIV Residential Rental Data | REIV is Victoria's peak real estate institute and publishes monthly vacancy and rental indicators from members and leases. | We used it for the metropolitan Melbourne vacancy rate level and trend. We used it to cross-check SQM's online-listing vacancy measure. |
| SQM Research Melbourne Vacancy Chart | SQM is a widely cited Australian housing data firm that publishes transparent vacancy series. | We used it to validate direction and seasonality of vacancy in Melbourne. We used it as a second, independent measure alongside REIV. |
| SQM National Vacancy Release (Nov 2025) | It's SQM's official published media release with definitions and headline vacancy movements. | We used it to corroborate that vacancy was easing slightly in late 2025 nationally. We used that as context for Melbourne's 2026 leasing speed expectations. |
| ABS Rental Market Insights | ABS is Australia's national statistics agency, and this article explains how CPI rents are measured. | We used it to explain paid rents versus advertised rents in plain English. We used it to justify why triangulating bond data plus portal data is the safest approach. |
| Victorian SRO Land Tax Rates | It's the official Victorian tax authority publishing the legally applied land tax rates and thresholds. | We used it to describe how land tax is calculated and what it depends on. We used it to build a realistic landlord cost estimate for typical investment properties. |
| ATO Rental Properties Guide 2025 | It's Australia's tax authority explaining the rules landlords must follow. | We used it to explain how rental income is taxed and what expenses are deductible versus capital. We used it to keep the tax section accurate and low-risk. |
| Consumer Affairs Victoria Utilities Guide | It's the Victorian consumer regulator explaining who pays what under rental rules. | We used it to list which utilities landlords commonly pay versus tenants. We used it to avoid folklore about bills and stick to the rules. |
| City of Melbourne Rates Calculation | It's an official local government source explaining how council rates are computed. | We used it to explain council rates in a simple formula-based way. We used it to ground our council-rate estimate in how councils actually bill. |
| ESC Rate Capping Outcomes Report 2025 | ESC is Victoria's independent regulator that monitors the council rate-capping framework. | We used it to explain why council rates usually rise gradually because of state rate caps. We used it as context for forecasting 2026 council-rate movements. |
| Rent.com.au Market Snapshot (July 2025) | It's a large rental listings platform publishing consistent, data-based leasing speed metrics. | We used it for a concrete median days online benchmark for houses versus apartments. We used it as a practical proxy for how fast rentals lease when official day-counts are not published. |
| University of Melbourne Key Dates 2026 | It's an official university calendar, which matters because students are a big chunk of renter demand in Melbourne. | We used it to support the seasonal demand peaks around Semester 1 and Semester 2. We used it as a simple explanation for why February and July matter. |
| Monash University Official Dates | It's another official university calendar, and Monash is one of Melbourne's largest student ecosystems. | We used it as a second university cross-check for the same seasonal leasing peaks. We used it to avoid over-relying on a single institution's calendar. |
| NAB Residential Property Survey (Sep 2025) | It's a major Australian bank's survey-based research used widely by investors and analysts. | We used it to frame the 2026 outlook with cooler rent growth compared with the surge years. We used it to cross-check portal narratives with a third-party macro view. |
Get the full checklist for your due diligence in Melbourne
Don't repeat the same mistakes others have made before you. Make sure everything is in order before signing your sales contract.
Related blog posts