Far East Consortium, one of the most respected property developers in Melbourne, recently asked the consultancy Urbis to produce a report titled “Melbourne CBD Market Outlook 2025.
” The goal was to better understand how the city’s property market works, what shapes buyer behavior, and what the economy may hold in 2025 and beyond. The report’s findings point to a Melbourne CBD that remains one of the most attractive property markets in Australia, backed by a growing population, major infrastructure projects, and strong rental demand.
Start with the people. According to the report, Melbourne is on track to overtake Sydney as Australia’s largest city by 2032, and its population is projected to reach 7.45 million by 2040. Immigration has driven steady growth across the past decade. In 2024 alone, 446,000 new overseas arrivals came to Melbourne, adding to demand for housing.
Supply is not keeping pace. The City of Melbourne estimates that 21,600 additional dwellings will be needed by 2028, yet only 8,900 new apartments are in the pipeline. That leaves a supply deficit of 60%. The gap between what the city needs and what is being built points to real potential for price growth and rental returns on CBD apartments. Understanding these demographic shifts is essential for anyone looking to build long-term wealth through property.
Public investment adds to the picture. Victoria has an infrastructure plan worth $107 billion, and several of its projects reach directly into the CBD and its surroundings. The Melbourne Greenline, due in 2025, is a $224 million project that will transform public spaces along the Yarra River and create a 4 km route with more recreation and event opportunities. The West Gate Tunnel Project, also due in 2025, is a major road upgrade that will offer an alternative to the West Gate Bridge, easing congestion and Improving links between Melbourne’s west and the CBD. The North East Link, scheduled for 2028, is the largest road project in Victoria’s history. It will connect key arterial roads across Melbourne’s north and east, cutting travel times and supporting urban growth in the region.
Two further projects run on longer timelines. The Queen Victoria Market Renewal, set for 2029, is a $268 million revitalization of the city’s iconic market. It will add new public spaces, restaurants, and activities to draw residents and visitors alike. The Suburban Rail Loop, due in 2035, will connect key suburbs, shorten commutes, and lift housing demand near transport hubs such as Clayton and Sunshine. Together, these projects strengthen Melbourne’s global appeal and its long-term property values. For investors, living close to these transport networks goes hand in hand with higher tenant retention and sustainable capital appreciation.
Against this backdrop, apartments hold a clear advantage in the CBD. In 2024, the median price of a CBD apartment was 56% below that of a detached house. That price gap is a key source of demand, and it illustrates one benefit of buying an apartment rather than land, since it puts ownership within reach of buyers who want high rental yields.
Rents tell a similar story. The median weekly rent in the CBD climbed to $750 in November 2024, from $690 in 2023, a 9% increase year over year. Vacancies averaged just 2.4% in 2024. Newly built CBD apartments have delivered gross rental yields of 4.8%, which adds to their investment appeal.
Room for new construction inside the CBD grid is running out. As a result, existing apartments are likely to see significant capital appreciation. The Melbourne CBD Market Outlook 2025 report notes that limits on new supply should push capital values higher while demand keeps outrunning supply. Any effective strategy for diversifying a property portfolio often begins with high-performing urban assets of this kind.
The wider economy supports the market as well. As of late 2024, unemployment stood at 4.0%, well below its 10-year average of 5.3%, a sign of the country’s resilient economy. Consumer confidence has Improved markedly. The ANZ-Roy Morgan Index rose 12 points year over year to reach 86.4 in December 2024. Inflation fell to 2.8% in September 2024. Together, these trends have created a favorable environment for property investment and for wealth management advisory services.
Interest rates may help too. Major banks, including ANZ and NAB, have forecast rate cuts that should lower borrowing costs and stimulate activity in the property market. By December 2025, the Reserve Bank of Australia’s cash rate is expected to fall to between 3.35% and 3.85%, which would Improve affordability further for investors using mortgage broker services or commercial real estate loans.
The picture, then, is of a CBD where rapid population growth, transformative infrastructure, and strong rental performance meet a shortage of new development sites. Existing apartments are positioned for capital growth as a result. Buyers should weigh many factors in Melbourne, and the right location is among the most critical. Working with a qualified financial advisor or buyer’s agent helps keep a portfolio in line with current macroeconomic shifts. For investors who want to capitalize on the strength of this market, the report’s message is that the time to act is now. The next step is to schedule a consultation with a certified wealth management expert and explore prime Melbourne CBD apartments.
To sum up, the numbers behind the CBD tell one consistent story: more people arriving, far fewer homes being built than needed, rents rising on tight vacancy, and billions flowing into infrastructure. It leaves a clear question for any investor about how much of that momentum is already reflected in today’s prices.
If you want to keep up with the latest news and analysis, subscribe to the channel so you don’t miss what comes next. Hit the like button if this video was useful, and turn on the notification bell so new videos reach you the moment they go live.”
