By 2040, its population is projected to reach 7.45 million. That forecast anchors the Melbourne CBD Market Outlook 2025, a report written by Urbis and commissioned by Far East Consortium, a developer widely regarded as one of Melbourne’s most respected. The document sets out to show how the city’s property market works, what shapes buyer behavior, and which direction the economy is heading in 2025 and after.
Using that growth projection as its starting point, the report argues that the central business district stands among the most attractive property markets in the country. Rising population, large infrastructure projects, and strong rental demand all pull the same way. Anyone considering an investment, it says, should understand local market fundamentals, financial planning, and wider economic trends.
The report builds its case on demand first. Over the past decade, Melbourne’s population has grown steadily, driven mostly by Immigration. In 2024 alone, 446,000 new overseas arrivals settled in the city, which increased pressure on housing. The City of Melbourne estimates that 21,600 additional dwellings will be needed by 2028, but only 8,900 new apartments are in the pipeline. That works out to a supply deficit of 60%. The report reads this shortfall as a sign of significant potential for price growth and rental returns on CBD apartments, and it says that grasping demographic shifts is essential for anyone who wants to build long-term wealth through property.
Prices and rents show how that demand is playing out. In 2024, the median price of a CBD apartment sat 56% below the median for a detached house. The report presents this gap as one advantage of buying an apartment instead of land: it gives buyers who are chasing high rental yields a more accessible way in.
Rents have been rising too. The median weekly rent in the CBD reached $750 in November 2024, compared with $690 in 2023, a year-on-year increase of 9%. Vacancy stayed low, averaging 2.4% through 2024. Newly built CBD apartments delivered gross rental yields of 4.8%, which adds to their appeal for investors.
Limited supply compounds the picture. Room for new development inside the CBD grid is running out, so the report expects existing apartments to see significant capital appreciation. It notes that restrictions on new supply should lift capital values as long as demand keeps outpacing availability. It also observes that effective portfolio diversification often begins with securing high-performing urban assets, and it names Melbourne CBD apartments as one example.
The national economy supplies a supportive backdrop. At the end of 2024, Australia’s unemployment rate stood at 4.0%, well under the 10-year average of 5.3%, which the report treats as evidence of a resilient economy. Consumer confidence has recovered as well. The ANZ-Roy Morgan Index climbed 12 points year-on-year to 86.4 in December 2024. Inflation dropped to 2.8% in September 2024. According to the report, these trends together have produced a favorable climate for property investment and wealth management advisory services.
Borrowing costs are also expected to ease. Major banks, including ANZ and NAB, have forecast rate cuts that should reduce loan costs and stimulate activity in the property market. By December 2025, the Reserve Bank of Australia’s cash rate is anticipated to fall to between 3.35% and 3.85%. That would Improve affordability further for investors who depend on mortgage broker services or commercial real estate loans.
Infrastructure is the report’s second pillar. Victoria’s $107 billion infrastructure plan contains several major projects that strengthen Melbourne’s liveability and its draw as an investment destination.
The Melbourne Greenline, due in 2025, is a $224 million project to transform public spaces along the Yarra River. It will create a 4-kilometer journey with expanded recreation and event opportunities.
The West Gate Tunnel Project, also due in 2025, is a major road upgrade that gives drivers an alternative to the West Gate Bridge. It is designed to ease congestion and Improve connectivity between Melbourne’s west and the CBD.
The North East Link, scheduled for 2028, is Victoria’s largest road project. It will join key arterial roads in Melbourne’s north and east, cut 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 will bring new public spaces, restaurants, and activities meant to attract residents and visitors.
The Suburban Rail Loop, expected in 2035, will connect key suburbs, shorten commutes, and boost housing demand near transport hubs such as Clayton and Sunshine.
In the report’s assessment, this wave of investment strengthens Melbourne’s global appeal and drives long-term growth in property values. For astute investors, it adds, living close to these transport networks correlates directly with higher tenant retention and sustainable capital appreciation.
The report’s conclusion pulls these threads together. Rapid population growth, transformative infrastructure, and strong rental performance combine to make the CBD an exceptional investment opportunity. Scarce development space inside the CBD grid sharpens that appeal, since existing apartments are positioned for capital growth. Among the many factors buyers must weigh, location is one of the most critical. A qualified financial advisor or buyer’s agent can help ensure that a portfolio fits current macroeconomic shifts. For investors who want to capitalize on the strength of Melbourne’s market, the report says the time to act is now, and it recommends scheduling a consultation with a certified wealth management expert to explore prime Melbourne CBD apartments.
The figures line up from start to finish: 446,000 new arrivals in 2024, a 60% apartment supply deficit, rents up 9% in a single year, and a $107 billion infrastructure plan reshaping the city. In Melbourne’s CBD, demand is outrunning supply, and the size of that gap raises the question of how long it can last.
If this breakdown gave you something useful, tap subscribe so you can keep following stories like this one. Give the video a like, and switch on the notification bell so the latest updates reach you the moment they’re published.”
