A 60% shortfall between the housing Melbourne’s central business district needs and the housing it is set to get sits at the center of a new property report.
The City of Melbourne projects that the CBD will require 21,600 new dwellings by 2028. The current apartment pipeline holds just 8,900 units. That gap is the report’s strongest card, and it supports the argument that CBD apartments merit serious consideration in 2025 and beyond.
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. Its purpose was to give a clearer view of how the city’s property market operates, what drives buyers, and where the economy may head in 2025 and the years after. The report concludes that the CBD ranks among Australia’s most attractive property markets, backed by population growth, transformative infrastructure, and strong rental demand. It adds that anyone weighing an entry should first understand why CBD apartments have held up so well as an asset class.
Demand starts with people. In 2024 alone, Melbourne took in 446,000 new overseas arrivals. Immigration has fueled robust growth over the past decade, and the 2024 intake added more pressure on housing. The report projects that Melbourne will pass Sydney as Australia’s largest city by 2032 and reach 7.45 million residents by 2040.
Set against that demand is the supply gap. The author of the material says a decade has gone into analyzing property cycles, and that clients keep hearing the same advice: limited supply is the ultimate foundation for long-term capital appreciation. When demand outruns supply by a margin like this one, the author contends, urban real estate tends to command premium valuations. Land adds to the squeeze. Sites for new developments inside the CBD grid are getting harder to find, so the material expects existing CBD apartments to gain significant capital value. The report puts it this way: “constraints on new supply should lead to growth in capital values as demand continues to outpace supply”.
Price is the second pillar, and the material frames it 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, making apartments the more accessible entry point for buyers.
Rental figures point the same way. Median weekly rent in the CBD hit $750 in November 2024, compared with $690 in 2023, a 9% increase year-on-year. Vacancy remained low, averaging 2.4% across 2024. Newly built CBD apartments produced gross rental yields of 4.8%, which the material says boosts their appeal to investors.
Government spending forms a third layer. Major infrastructure projects lift Melbourne’s livability and its draw as an investment destination, and the material highlights five, arranged by completion date.
Two land in 2025. The Melbourne Greenline is a $224 million project that will transform public spaces along the Yarra River, creating a 4-kilometer route with expanded recreation and event opportunities. The West Gate Tunnel Project is a major road upgrade offering drivers an alternative to the West Gate Bridge, intended to ease congestion and strengthen the connection between Melbourne’s west and the CBD.
The North East Link arrives in 2028. It is the largest road project in Victoria, and it will join key arterial roads across Melbourne’s north and east, shortening 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, bringing new public spaces, restaurants, and activities designed to attract residents and visitors. Furthest out, in 2035, the Suburban Rail Loop will connect key suburbs, with the aim of shortening commutes and increasing housing demand near transport hubs such as Clayton and Sunshine.
All five sit within Victoria’s $107 billion infrastructure plan. The material says the plan strengthens Melbourne’s global appeal and drives long-term growth in property values. The author adds that, in their experience, values consistently rise faster in corridors directly touched by government capital expenditure.
The broader economy supplies the last pillar. The material says Australia’s strong economic fundamentals underpin the Melbourne market. As of late 2024, unemployment stood at 4.0%, well below 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 rose 12 points year-on-year to 86.4 in December 2024. Combined with inflation easing to 2.8% in September 2024, that sentiment has created a favorable climate for property investment.
Interest rates may add support. Major banks, including ANZ and NAB, forecast rate cuts, which are expected to lower borrowing costs and stimulate 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.
Drawing these threads together, the material argues that rapid population growth, transformative infrastructure, and strong rental performance give the Melbourne CBD an exceptional mix. Scarce new development within the CBD grid sharpens 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.
In the end, the report stands on four figures: 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 on that scale is the question the report leaves open.
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