Looking further out, the Melbourne CBD Market Outlook 2025 projects the city’s population at 7.45 million by 2040. That forecast sits at the center of the case for buying apartments downtown.
Far East Consortium, one of Australia’s most respected Melbourne property developers, commissioned the report. It hired Urbis to examine how the city’s property market operates, what drives buyers, and how the economy may look in 2025 and beyond. The advisor who shared this material says that after a decade of guiding clients through Victoria’s real estate cycles, few moments have looked better for a strategic purchase. Melbourne CBD remains among the country’s most attractive property markets, backed by a growing population, major infrastructure projects, and strong rental demand.
Start with people. Immigration has fueled steady growth across Melbourne for ten years, and in 2024 alone the city welcomed 446,000 new overseas arrivals. Housing demand keeps climbing as a result. The City of Melbourne estimates the city will need 21,600 additional dwellings by 2028, but only 8,900 new apartments are in the pipeline. That leaves a supply deficit of 60%. For investors comparing real estate investment trusts with direct property purchases, this structural shortage underpins long-term capital appreciation, and it signals real potential for both price growth and rental returns.
Price is another draw. Apartments cost less than land-based homes, and in 2024 the median apartment price in the CBD ran 56% below the median for a detached house. For many buyers, that makes an apartment the easier way in.
Rents point the same direction. The median weekly rent hit $750 in November 2024, up from $690 in 2023, a 9% jump year-on-year. Vacancy stayed tight, averaging 2.4% across 2024, and newly built CBD apartments delivered gross rental yields of 4.8%. Because space for new development inside the CBD grid is running out, existing apartments appear set for significant capital growth. The Melbourne CBD Market Outlook 2025 states that “constraints on new supply should lead to growth in capital values as demand continues to outpace supply”. Investors can protect these yields from operational swings by securing comprehensive landlord insurance and conducting thorough property management reviews.
Public works add a further layer. Victoria has an infrastructure plan worth $107 billion, which raises Melbourne’s global profile and supports long-term property values. Five projects within it stand out.
The Melbourne Greenline, due in 2025, is a $224 million project to remake public spaces along the Yarra River. It will create a 4 km route with better recreation and event options.
The West Gate Tunnel Project, also due in 2025, is a major road upgrade offering drivers an alternative to the West Gate Bridge. It should ease congestion and Improve links between Melbourne’s west and the CBD.
The North East Link, scheduled for 2028, is Victoria’s largest road project. It will connect key arterial roads in Melbourne’s north and east, shorten travel times, and support urban growth across the region.
The Queen Victoria Market Renewal, set for 2029, is a $268 million revitalization of the city’s iconic market. It adds public spaces, restaurants, and activities to draw residents and visitors.
The Suburban Rail Loop, planned for 2035, will link key suburbs, cut commute times, and lift housing demand near transport hubs such as Clayton and Sunshine.
For investors pursuing commercial real estate loans or residential mortgages, properties close to these transit corridors have consistently beaten broader market averages.
The national economy supplies the backdrop. As of late 2024, unemployment stood at 4.0%, well below the 10-year average of 5.3%, a sign of a resilient economy. Consumer confidence has rebounded too: the ANZ-Roy Morgan Index rose 12 points year-on-year to 86.4 in December 2024. Inflation eased to 2.8% in September 2024. Together, these trends have produced a favorable climate for property investment.
Lending conditions may help as well. Major banks, including ANZ and NAB, forecast interest rate cuts that should reduce 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 for investors using home loans or investment property loans.
Rapid population growth, transformative infrastructure, and strong rental performance, taken together, make Melbourne CBD an exceptional investment opportunity. With so little room left for new development inside the CBD grid, existing apartments are positioned for capital growth. Of the many factors to weigh when buying in Melbourne, location remains one of the most critical. For investors who want to capitalize on the market’s strength, the advisory team invites them to get in touch to explore curated opportunities in Melbourne CBD apartments and to schedule a one-on-one portfolio consultation.
A growing city, a narrowing window for new supply, and rents that keep rising: the numbers all lean the same way. Whether those forces carry the market through 2025 and beyond is the question every prospective buyer will have to answer.
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