A single forecast sits at the center of the Melbourne CBD Market Outlook 2025: by 2040, the city’s population is projected to reach 7.
45 million. Before that, by 2032, Melbourne is expected to overtake Sydney as Australia’s largest city. Urbis wrote the report, and Far East Consortium, a developer widely regarded as one of Melbourne’s most respected, commissioned it. Its stated purpose is to explain how the city’s property market works, what drives buyer behavior, and where the economy is heading in 2025 and beyond.
Starting from that growth figure, the report contends that the central business district ranks among the most attractive property markets in the country. A growing population, major infrastructure projects, and strong rental demand all push in the same direction. Anyone weighing an investment, the report says, should grasp local market fundamentals, financial planning, and broader economic trends.
Infrastructure forms one of the report’s two main pillars. Victoria’s $107 billion infrastructure plan includes several major projects that raise Melbourne’s liveability and its pull as an investment destination.
The Melbourne Greenline, due in 2025, is a $224 million project to transform public spaces along the Yarra River, creating a 4-kilometer journey with more recreation and event opportunities. The West Gate Tunnel Project, also due in 2025, is a major road upgrade offering drivers an alternative to the West Gate Bridge. It is meant to relieve 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, 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, bringing new public spaces, restaurants, and activities to draw residents and visitors. The Suburban Rail Loop, expected in 2035, will link key suburbs, shorten commutes, and lift housing demand near transport hubs such as Clayton and Sunshine.
According to the report, this wave of spending strengthens Melbourne’s global appeal and drives long-term growth in property values. It adds that, for astute investors, living near these transport networks correlates directly with higher tenant retention and sustainable capital appreciation.
Demand is the report’s other pillar. Over the past decade, Melbourne’s population has grown steadily, mostly because of Immigration. In 2024 alone, 446,000 new overseas arrivals settled in the city, adding pressure to the housing market. 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 amounts to a supply deficit of 60%. The report interprets the shortfall as a sign of significant potential for price growth and rental returns on CBD apartments, and it says understanding demographic shifts is essential for anyone aiming 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 was 56% below the median for a detached house. The report frames this gap as one advantage of buying an apartment rather than land, since it offers buyers pursuing high rental yields a more accessible entry point.
Rents are climbing as well. The median weekly rent in the CBD reached $750 in November 2024, up from $690 in 2023, a year-on-year increase of 9%. Vacancy remained low, averaging 2.4% through 2024. Newly built CBD apartments delivered gross rental yields of 4.8%, which adds to their appeal for investors.
Supply constraints make the picture tighter. Space for new development inside the CBD grid is running out, so the report expects existing apartments to see significant capital appreciation. It notes that limits on new supply should push up capital values for as long as demand continues to outpace availability. It also observes that effective portfolio diversification often starts with securing high-performing urban assets, and it names Melbourne CBD apartments as one example.
The national economy provides a supportive backdrop. At the end of 2024, Australia’s unemployment rate was 4.0%, well below the 10-year average of 5.3%, which the report treats as evidence of a resilient economy. Consumer confidence has recovered too: the ANZ-Roy Morgan Index rose 12 points year-on-year to 86.4 in December 2024. Inflation fell to 2.8% in September 2024. In the report’s words, these trends together have created 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 lower 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 rely on mortgage broker services or commercial real estate loans.
The report’s conclusion ties 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, because 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 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 numbers point the same way throughout: 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. Demand in Melbourne’s CBD is running ahead of supply, and the size of that gap leaves open the question of how long the Imbalance can hold.
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