Inner Melbourne apartment completions in 2025 are projected to be at a 10-year low, however projected supply is positive towards to the end of the decade being led by build-to-rent developments

• Apartment supply in Melbourne is projected to be at a 10-year low in 2025. Year to date there have been 846 apartment completions in Inner Melbourne, with a further 1,185 expected to be completed by the end of the year.
• This will be almost half the number of completions in 2024.

Median apartment sale prices remain largely stagnant since early-2023

• Melbourne’s apartment market continues to face challenges with the median sale price seeing a small dip of 0.7% year-on-year. One-bedroom apartments saw the largest year-on-year dip in price of 2.5%.
• Median apartment price growth over a 10-year period now sits at 1.8% per annum. The median sale price of $610,000 has remained relatively stable since Q2 2023.

Apartment rents are still seeing growth, providing some confidence to investors and developers in the rental market

• Median apartment rental growth continues to slow into Q2 2025, however is still positive with the median apartment rents increasing 1.8% year-on-year. Two-bedroom apartment rents continue to outpace the wider apartment market with year-on-year rental growth at 4.5%. Over a 10-year period, rents have outpaced sales growth with an average growth rate of 4.5% per annum over the period. Melbourne continues to have the highest vacancy rate amongst the capital cities with rental vacancy currently at 1.8%.
• While prices have remained stable, the volume of apartment sales remains strong, fuelled by increasing market confidence and increasing affordability for first-home buyers especially. With lower current pricing levels and a growth outlook, investor activity will likely increase despite higher ownership costs.

Outlook

• Melbourne’s relative affordability to other major Australian cities will likely see continued transactional activity in the sales market, especially with positive-growth prospects into the medium term. As this occurs, an uplift in capital values is expected.
• The supply outlook is positive for build-to-rent apartments but constrained for build-to-sell developments. Lower supply in the apartment sales market may continue out towards 2030, but if price growth trends see an uptick development projects could be brought forward.