Victoria has committed $107 billion to infrastructure, and a new property report treats that spending as one pillar of a broader claim: that Melbourne’s central business district ranks among the strongest property markets in Australia.
The document is titled “Melbourne CBD Market Outlook 2025.” Urbis wrote it for Far East Consortium, a Melbourne property developer with a strong reputation across the country. The study examines how the city’s property market operates, what motivates buyers, and where the economy is headed in 2025 and beyond. It concludes that the CBD remains highly attractive, backed by population growth, major public works, and robust demand from renters.
The foundation of that argument is a mismatch in the numbers. The City of Melbourne estimates that the CBD will need 21,600 additional dwellings by 2028. Only 8,900 new apartments are in the pipeline. The result is a shortfall of roughly 60%, which the report reads as room for both price growth and rental returns. Land available for fresh development inside the CBD grid is also running low, so the authors expect existing apartments to post significant capital gains. Whether an investor buys property directly or goes through real estate investment trusts, the report says, this structural undersupply supports long-term capital appreciation. In its words: “constraints on new supply should lead to growth in capital values as demand continues to outpace supply.”
The demand behind that gap comes first and foremost from people. In 2024 alone, Melbourne welcomed 446,000 new overseas arrivals, and Immigration has fueled steady growth in the city for a decade. Melbourne is on track to pass Sydney as Australia’s largest city by 2032, and projections place its population at 7.45 million by 2040. Every new wave of arrivals adds weight to a housing stock that is already stretched.
Cost of entry strengthens the case. Apartments sell for far less than detached houses, and the report counts that difference as a selling point for apartments over land. In 2024, the median price of a CBD apartment sat 56% below the median for a detached house, which opened ownership to a wider group of buyers.
Two arrive in 2025. The Melbourne Greenline is a $224 million effort to reshape public spaces along the Yarra River, producing a 4 km route with more recreation and event opportunities. The West Gate Tunnel Project is a major road upgrade that offers drivers an alternative to the West Gate Bridge, with the aim of easing congestion and tightening links between Melbourne’s west and the CBD.
The North East Link follows in 2028. It is the largest road project in Victoria’s history, connecting key arterial roads across the city’s north and east, shortening travel times, and supporting urban growth in that region. In 2029, the Queen Victoria Market Renewal will deliver a $268 million revitalization of the city’s iconic market, adding public spaces, restaurants, and activities for residents and visitors. The Suburban Rail Loop, expected in 2035, will connect key suburbs, shorten commutes, and lift housing demand around transport hubs such as Clayton and Sunshine. For investors weighing commercial real estate loans or residential mortgages, the report says properties near these transit corridors consistently outperform broader market averages.
Pulling these threads together, the report portrays Melbourne CBD as an exceptional investment opportunity, resting on rapid population growth, transformative infrastructure, and strong rental performance. The scarcity of new developments inside the CBD grid adds to the appeal, and existing apartments are positioned for capital growth. Location, it stresses, is among the most critical of the many factors in buying in Melbourne. For investors who want to capitalize on the market’s strength, the report’s message is that the time to act is now. It invites readers to contact the advisory team to explore curated opportunities in Melbourne CBD apartments and to schedule a one-on-one portfolio consultation.
Strip the report down to its core and three numbers stand out: a 60% supply gap, 446,000 overseas arrivals in a single year, and a $107 billion public investment plan. Whether new construction can close that gap before the 2028 target is the question those figures leave on the table.
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