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Autumn/26
Melbourne
New Build Apartments
New build apartment pipeline Update
Active pipeline
In Melbourne, the average annual pipeline for new build apartments is trending 43% lower than the 5-year average, according to McGrath Research Considering the time taken for development approval, marketing and construction for projects with 6+ apartments and 3+ storeys, Melbourne could potentially count a total of 24,859 new apartments across projects to be built by the end of 2029, with an average 6,215 new apartments delivered each year By the end of 2026, an estimated total of 9,210 new apartments are due for completion, this being 29% higher than what was delivered in 2025 Over the 2021-2025 timeframe, 54,960 new apartments were built, averaging 10,992 per year.
Total number of new apartments Melbourne, built or due to be completed
Apartment configurations 39%
New apartments bedroom mix Melbourne, due for completion 2026-2029
When exploring the configuration of Melbourne’s new build apartment active pipeline due for completion between 2026 and 2029, 39% of apartments are proposed to be a 2-bedroom apartment, 30% are allocated as a studio or have 1-bedroom and 32% have 3-bedrooms or more, as reported by McGrath Research
New apartment prices across Melbourne rose by 15 7% in the year ending Q4/25, with 2 1% being in the past quarter The average new apartment price was $14,700/per square metre (sqm) at this time, as reported by McGrath Research This demonstrates ongoing underlying demand is outpacing the delivery of new supply Annual new apartment price growth has averaged 7.7% over the past five years. New apartment prices +15.7%
Tracking new apartment average prices Melbourne, per square metre
Average Price per square metre
$14,700
Range of new apartment average prices Melbourne, per square metre, Q3/25
Melbourne’s inner suburbs saw the most growth in new apartment prices in the year ending Q4/25, according to McGrath Research. Prices in the inner suburbs grew 17.2% to an indicative $15,000 per sqm in this time, to range between an average of $9,500 and $21,500/sqm. Middle suburbs recorded a rise in prices by 10 6% with $13,600/sqm ($11,000 to $18,000/sqm) and the outer suburbs rose 10 0% to $11,000/per sqm, ranging from $9,000 to $11,500/sqm.
Q4/25
Median price $878,100
Melbourne residential property prices have trended higher than a year ago Prices across Melbourne rose by 6 5% in the year ending Q4/25, with a 1 7% increase recorded in the most recent quarter As a result, the median residential value reached $878,100. Residential values shift with changes in interest rates, supply and demand, economic conditions, population trends and local infrastructure which influences market appeal and buyer capacity Annual residential price growth has averaged 2 4% over the past five years
Price outlook +4%
Tracking median prices
Looking ahead, Melbourne residential prices are likely to rise over the coming year McGrath Research forecast Melbourne residential property prices to increase by 4% at the end of 2026, followed by a further 3% rise in 2027 Residential price forecasts consider interest rates, the balance of supply and demand, economic conditions, population trends and local infrastructure which shapes affordability, demand and market direction
Forecast for median prices
Residential rental vacancy Melbourne Vacancy 2.4%
The number of residential rental homes in Melbourne is currently undersupplied Melbourne rental vacancy was recorded at 2 4% at the end of Q4/25, falling 10 bps in the quarter whilst changing 0 bps over the past year according to REIA Generally, around 3% vacancy is considered a balanced market between rental supply and demand. Below this equilibrium is considered to be an undersupplied pool of rental homes, which places upwards pressure on weekly rents For the past five years, Melbourne residential rental vacancy has averaged 3 4%
Gross rental yield Melbourne Yield +0 bps
Melbourne gross rental yields have trended stable over the past year Residential yields fell 5 bps in the Q4/25 quarter to be 3.85% across Melbourne, whilst similar compared to a year ago A yield pushing beyond 4% is more desirable for investment properties located in capital cities, while below this, tends to show higher property values relative to rental income Melbourne gross rental yields have averaged 3 31% over the past five years
Change from a year ago
Residential rents across Melbourne trended above the weekly rate recorded a year ago Melbourne rents rose 0 9% in Q4/25, whilst increasing 2 7% over the past year, to stand at $580 per week Rent changes are driven by rental supply, tenant demand, migration trends, economic conditions and investor activity which together impact the vacancy rate. For the past five years, Melbourne rents grew an average 5 9% per annum.
Tracking median weekly rents
Forecast for median rents Melbourne Rental outlook +5%
The Melbourne residential market is continuing to experience upward pressure on weekly rents McGrath Research forecast Melbourne rents to rise 5% at the end of 2026, with a further 4% rise likely in 2027 Rental forecasts take into consideration new and existing supply levels, tenant demand, population changes, economic conditions and local infrastructure all which can influence vacancy rates, rental pressure and future rental growth
Definitions
New build apartments
New apartments are defined as being within a 3+ storey building and with 6+ apartments as defined by McGrath Research.
Melbourne
Melbourne refers to the Greater Capital City Statistical Area or ‘Greater Melbourne’ as defined by the Australian Bureau of Statistics
Inner suburbs
The inner suburbs are considered to be within the 0-10km ring from the Melbourne CBD as defined by McGrath Research
Middle suburbs
The middle suburbs are considered to be within the 10-20km ring from the Melbourne CBD as defined by McGrath Research
Outer suburbs
The outer suburbs are considered to be outside the 20km ring from the Melbourne CBD as defined by McGrath Research
Guiding you home
Michelle Ciesielski National Head of Research, McGrath Research
www.mcgrath.com.au/research
