In 2024 alone, Melbourne took in 446,000 new overseas arrivals.
A recent market report treats that number as one foundation of its argument that apartments in the city’s central business district, or CBD, deserve a serious look in 2025 and the years that follow.
The document is the Melbourne CBD Market Outlook 2025. Far East Consortium, a Melbourne property developer regarded as one of the most respected in Australia, commissioned it, and the research firm Urbis produced it. The goal was a sharper picture of how the city’s property market works, what motivates buyers, and where the economy may be heading in 2025 and beyond. The report’s verdict is that the CBD ranks among Australia’s most attractive property markets, supported by population growth, transformative infrastructure, and strong rental demand. It also says anyone considering entering the market should understand why CBD apartments have proven so resilient as an asset class.
Population is the first pillar. The report projects that Melbourne will overtake Sydney as Australia’s largest city by 2032 and reach 7.45 million residents by 2040. Immigration has powered robust growth over the past decade, and the 2024 intake added further pressure on housing.
Against that backdrop sit the supply numbers. The City of Melbourne projects that the CBD will need 21,600 new dwellings by 2028. The current apartment pipeline holds only 8,900 units, which leaves supply 60% short of demand. On the strength of that gap, the report sees considerable room for price growth and rental returns on CBD apartments.
The author of the material says a decade has gone into analyzing property cycles. According to the author, clients keep hearing the same counsel: restricted supply is the ultimate base for long-term capital appreciation. When demand overshoots supply by this margin, the author contends, urban real estate tends to command premium valuations.
Land is scarce as well. Sites for new developments within the CBD grid are becoming harder to find, so the material expects existing CBD apartments to see significant capital appreciation. The Melbourne CBD Market Outlook 2025 report states that “constraints on new supply should lead to growth in capital values as demand continues to outpace supply”.
Affordability forms the second pillar, and the material presents price as a reason to choose an apartment over land. In 2024, the median price of a CBD apartment was 56% lower than the median for a detached house, which made apartments the more accessible route for buyers.
Rental data moves in the same direction. Median weekly rent in the CBD reached $750 in November 2024, up from $690 in 2023, a 9% increase year-on-year. Vacancy stayed low, averaging 2.4% across 2024. Newly built CBD apartments delivered gross rental yields of 4.8%, which the material says strengthens their appeal to investors.
Public spending adds another layer. Major infrastructure projects raise Melbourne’s livability and its draw as an investment destination, and the material singles out five of them.
Two arrive in 2025. The Melbourne Greenline is a $224 million project that will reshape public spaces along the Yarra River, producing a 4-kilometer route with expanded recreation and event opportunities. The West Gate Tunnel Project is a major road upgrade that gives drivers an alternative to the West Gate Bridge, with the aim of easing congestion and strengthening the link between Melbourne’s west and the CBD.
The North East Link follows in 2028. It is the largest road project in Victoria, and it will connect key arterial roads across Melbourne’s north and east, cutting travel times and supporting urban growth in the region. In 2029 comes the Queen Victoria Market Renewal, a $268 million revitalization of Melbourne’s iconic market that brings new public spaces, restaurants, and activities meant to attract residents and visitors. Furthest out, in 2035, the Suburban Rail Loop will link key suburbs, with the intent of shortening commutes and lifting housing demand near transport hubs such as Clayton and Sunshine.
All five fall under Victoria’s $107 billion infrastructure plan. The material says the plan raises Melbourne’s global appeal and drives long-term growth in property values. The author adds that, in their experience, values consistently climb faster in corridors directly touched by government capital expenditure.
The wider economy supplies the final pillar. The material says Australia’s strong economic fundamentals underpin the Melbourne market. As of late 2024, unemployment stood at 4.0%, well under the 10-year average of 5.3%, a figure the material reads as a sign of resilience. Consumer confidence has also Improved significantly: the ANZ-Roy Morgan Index climbed 12 points year-on-year to 86.4 in December 2024. Together with inflation easing to 2.8% in September 2024, that sentiment has produced a favorable climate for property investment.
Interest rates could lend further support. Major banks, including ANZ and NAB, forecast rate cuts, which are expected to reduce borrowing costs and spur more activity in the property market. The Reserve Bank of Australia’s cash rate is anticipated to fall to between 3.35% and 3.85% by December 2025, which would further Improve affordability for investors seeking Melbourne CBD apartments.
Pulling these strands together, the material argues that rapid population growth, transformative infrastructure, and strong rental performance give the Melbourne CBD an exceptional combination. Scarce new development within the CBD grid adds to the appeal, since existing apartments are positioned for capital growth. Buyers in Melbourne have many factors to weigh, and the material ranks location among the most critical. For investors hoping to capitalize on the market’s robust dynamics, it says the time to act is now. It invites readers to take the next step in their wealth-creation journey by exploring a curated portfolio of premium Melbourne CBD apartments and scheduling a private consultation with a senior advisory team to secure a position in this thriving market.
Reduced to its core, the report rests on a 60% supply gap, a population heading toward 7.45 million, rising rents, and a $107 billion infrastructure plan. Whether the city’s apartment supply can keep pace with demand of this size is the question the report leaves open.
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