Melbourne’s inner precinct saw just over 2,000 apartment completions in 2025 which is a 10-year low

• New apartment completions in Melbourne hit a 10-year low in 2025, with just over 2,000 units finished in the inner city. 
• However, this declining supply trend is set to reverse in 2026, with forecasts pointing to nearly 4,000 completions from projects already under construction.

Median apartment sale price in Melbourne has finished 2025 at $615,000 with the median sale price remaining largely stagnant since early-2023

• Melbourne’s apartment market pricing remained stable, with values at the end of 2025 largely unchanged compared to the previous two years. This stability extends to the housing market, where house prices have also remained flat over the same period.
• Median apartment rent growth was modest in the latter half of 2025, posting a 3.6% year-on-year increase. In contrast, median house rents in Melbourne fell by 0.9% year-on-year.

Apartment rents are seeing some growth albeit modest however buyer activity is increasing

• Melbourne continues to have the highest rental vacancy rate among Australia’s capital cities, reaching 2.0% in Q4 2025, up from 1.8% the previous quarter. 
• This rate is now approaching the city’s long-term average of 2.3%. Despite stable prices, apartment sales volumes remain strong. This activity is fuelled by growing market confidence and improved affordability for first-home buyers, who are benefiting from reduced interest rates without facing price increases.

Outlook

• Melbourne’s relative affordability compared to other major Australian cities is expected to sustain strong transactional activity. This continued demand will likely translate into upward pressure on apartment prices in the medium term. Although the pipeline for new apartments in Inner Melbourne appears strong, many of these developments are only at the planning stage.
• Current market conditions are delaying the commencement of construction, which could constrain future supply. Finally, the robust supply pipeline for build-to-rent (BTR) apartments is expected to keep rental growth modest. This trend would likely only be reversed by a significant acceleration in Melbourne’s population growth.