A Comprehensive Analysis by Solomon Bloom
Melbourne Housing Market
Melbourne, Victoria
A city outgrowing its housing at every turn.
50K+
Dwellings Required Annually
15K+
Apartments Needed p.a.
~30K
Forecast Undersupply 2025–2028
4.5K–5K
South Melb Shortfall 2025–2028
Australia's Fastest Growing City
Melbourne's population growth will outpace every other Australian capital over the next decade, driving relentless housing demand.
+50,000 Dwellings Needed Every Year
One third must be apartments — over 15,000 units per year. Delivery has fallen critically short.
A 30,000-Apartment Supply Gap
Only 10,500 apartments p.a. delivered over the last 5 years. The cumulative shortfall from 2025 to 2028 is forecast at ~30,000.
South Melbourne at the Epicentre
A forecast shortfall of 4,500 to 5,000 apartments in South Melbourne alone over 2025 to 2028, creating rare scarcity in a premium location.
Source: Charter Research, February 2025
Melbourne Housing Market
Melbourne's population growth will outpace all other capitals
Population growth drives demand for additional and diverse forms of dwellings.
Growth has been very strong and is forecast to continue to be strong.
Melbourne will be the fastest growing city over this period of time.
Population Growth Forecast — Metro Regions (FY24 – FY29) • Persons p.a. (Millions)
Source — ABS, CFP, Charter Keck Cramer
Melbourne Housing Market
A recalibration will occur over the next 12 to 24 months
Melbourne has not had the post covid growth that all the other cities and states have had.
Melbourne is now ranked 6th in Australia. It is usually ranked 2nd behind Sydney.
Demand is already being deflected back to Melbourne given the attractive price point.
Post-2020 Growth
Unit Prices Index (End 2020 = 100)
Source — Corelogic, Charter Keck Cramer
Market Signals
Apartments gained 7.1% in Melbourne in 2024, outpacing houses at 6.6%. Driven by a severe undersupply of new units and a development pipeline increasingly focused on premium projects, the gap is expected to widen.
David Bonaddio
Real Estate Reporter · Herald Sun
Annual Growth 2024
Apartments vs Houses by City
New forecasts reveal where house and unit prices are tipped to grow fastest across Australia in 2026. KPMG warns that Melbourne's prolonged underperformance has created a rare window — and a surge is now inevitable as population pressure mounts and supply remains critically constrained.
David Bonaddio
Real Estate Reporter · Herald Sun
CBRE Research confirms premium apartments in suburbs with median unit values above $1.5M grew at more than twice the rate of affordable counterparts over 10 years. The data across Sydney, Melbourne, and Brisbane is unambiguous.
CBRE Research Team
Premium Exceptionalism Report · 2025
CBRE Research
10-Year CAGR by Apartment Price Tier
Source: CBRE Research 2025
CBRE Research
CBRE Research confirms that premium apartments consistently deliver superior returns relative to cheaper, less premium property. The data across Sydney, Melbourne and Brisbane is unambiguous.
Figure 8 — CBRE Research
Sydney Office NER growth in 2024, at building level
Source: CORE Research
Figure 8 — CBRE Research
10 year CAGR (%) vs Median unit value ($M)
Source: CBRE Research
The Clear Takeout
"Premium apartments in suburbs with median unit values above $1.5M grew at more than twice the rate of affordable counterparts over 10 years."
CBRE Research
Why Melbourne. Why Now.
+7.1%
Apartment Growth
Apartments outperformed houses in Melbourne in 2024, gaining 7.1% versus 6.6% for houses.
6.5%
10yr CAGR Premium
Premium apartments in Sydney suburbs valued over $1.5M delivered up to 6.5% compounding annual growth over 10 years.
#6
Ranked for Value
Melbourne is now ranked 6th in Australia for price. It typically ranks 2nd. This represents a rare buy window before recalibration.
1.8%
Vacancy Rate
Inner Melbourne units sit at a 1.8% vacancy rate, well below the broader market average of 2.5%.
Melbourne Housing Market
Metro Melbourne Apartments
Supply vs Demand · Annual Apartments (Thousands)
Source: Charter Research, February 2025
Melbourne Housing Market
South Melbourne sits at a compelling price point. Central, accessible, and positioned between the CBD and Melbourne's most prestigious suburbs.
Data to September 2024. Source: Charter Research.
Median Unit Price
$591,000
Median House Price
$1,500,000
South Melbourne Housing Market
Market fundamentals shaped by supply constraints, strong demand, and structural undersupply driving sustained price growth.
Supply Shortage
Imbalance expected to persist
Price Growth
Apartment growth in 2024
Forecast Gap
2025–2028 undersupply
Skilled Workforce
Professionals & Managers
Young Renters
25–34-year-olds
Single Households
Lone person households
Annual Commencements
Last 2 years average
Vacancy Rate
vs 2.5% broader market
Forecast Completions
Below decade average
Source: Charter Research, February 2025, Melbourne Residential Supply Market Overview
Lifestyle & Locale
The epicentre of Melbourne's food and culture. Home to the iconic South Melbourne Market, a vibrant foodie scene, and eclectic laneway galleries.
A cosmopolitan beachside destination blending waterfront dining with artisanal producers and bay walks. Renaissance meets contemporary sophistication.
Australia's cultural capital. World-renowned galleries, iconic theatres, and cutting-edge dining hidden in famous laneways.
Opulent entertainment and dining destination. Riverside luxury, world-class restaurants, and cultural venues with the Yarra as your backdrop.
Education & Innovation
University of Melbourne
Historic Campus
Architecture & Heritage
RMIT InnovationMelbourne is renowned for its world-class education and has two universities, RMIT and The University of Melbourne, listed in the world's top 100 universities.
The University of Melbourne has purchased a 7.2-hectare site in the Fishermans Bend Employment Precinct, providing a world-class engineering and design campus for large, experimental research, hands-on learning and collaboration with industry.
Research
Prepared by Charter Keck Cramer, CBRE
Charter Keck Cramer
Residential Build to Sell & Build to Rent Apartments, Melbourne H1 2024
CBRE Research
Report | Intelligent Investment, January 27, 2025
Charter Research
Local Market Intelligence Report, March 2024
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