By 2032, Melbourne is projected to overtake Sydney as the largest city in Australia.
By 2040, its population is expected to reach 7.45 million, according to the Melbourne CBD Market Outlook 2025. That projection anchors the argument that the city’s central business district remains one of the most attractive property markets in the country. A growing population, major infrastructure projects, and strong rental demand all point in the same direction. Anyone weighing an investment there needs a firm grasp of local market fundamentals, financial planning, and wider economic trends.
The report has a clear origin. Far East Consortium, regarded as one of the most respected property developers in Melbourne, commissioned Urbis to produce it. The goal was to understand how the city’s property market works, what shapes the behavior of buyers, and what the economic outlook looks like for 2025 and the years that follow.
Population growth sits at the center of the demand story. Over the past decade, Melbourne has recorded steady gains, driven largely by Immigration. In 2024 alone, the city took in 446,000 new overseas arrivals, adding to the pressure on housing. The City of Melbourne estimates that 21,600 additional dwellings will be required by 2028. The current apartment pipeline, however, falls well short of that figure, with only 8,900 new apartments expected. That leaves a supply deficit of 60%.
According to the report, this mismatch between supply and demand signals significant potential for price growth and rental returns on CBD apartments. Understanding demographic shifts, the report adds, is essential for anyone aiming to build long-term wealth through property.
Price and rent figures show how that demand is playing out. In 2024, the median price of an apartment in the CBD was 56% lower than that of a detached house. That makes apartments a more accessible entry point for buyers pursuing high rental yields, and it illustrates one advantage of buying an apartment rather than land.
Rents have climbed as well. The median weekly rent in the CBD rose to $750 in November 2024, up from $690 in 2023, a year-on-year increase of 9%. Vacancy was low, averaging 2.4% across 2024. Newly built apartments in the CBD achieved gross rental yields of 4.8%, which reinforces their appeal to investors.
Supply constraints add another layer. Opportunities for new development within the CBD grid are becoming increasingly scarce, so existing apartments are likely to see significant capital appreciation. The Melbourne CBD Market Outlook 2025 notes that limits on new supply should lift capital values as demand keeps outpacing what is available. The report also points out that effective portfolio diversification often starts with securing high-performing urban assets, and it names Melbourne CBD apartments as an example.
The broader economy provides a supportive backdrop. As of late 2024, Australia’s unemployment rate stood at 4.0%, well below the 10-year average of 5.3%, a sign of a resilient economy. Consumer confidence has Improved as well. The ANZ-Roy Morgan Index climbed 12 points year-on-year to reach 86.4 in December 2024. Inflation, meanwhile, fell to 2.8% in September 2024. Together, these trends have created a favorable environment for property investment and wealth management advisory services.
Interest rates are expected to ease too. Major banks, including ANZ and NAB, have forecast rate cuts that should lower borrowing costs and stimulate more 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 further Improve affordability for investors who use mortgage broker services or commercial real estate loans.
Infrastructure is the other pillar. Melbourne’s liveability and its appeal as an investment destination are reinforced by a series of major projects, all part of Victoria’s $107 billion infrastructure plan.
The Melbourne Greenline, due in 2025, is a $224 million project that will 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 will offer 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 connect key arterial roads in Melbourne’s north and east, cutting travel times and supporting 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 add new public spaces, restaurants, and activities to attract residents and visitors.
The Suburban Rail Loop, expected in 2035, will connect key suburbs, reduce commute times, and boost housing demand near transport hubs such as Clayton and Sunshine.
According to the report, this wave of investment enhances Melbourne’s global appeal and drives long-term growth in property values. For astute investors, proximity to these transport networks correlates directly with higher tenant retention and sustainable capital appreciation.
The report’s conclusion draws these threads together. Rapid population growth, transformative infrastructure, and strong rental performance combine to make the CBD an exceptional investment opportunity. The scarcity of new developments inside the CBD grid adds to that appeal, because existing apartments are positioned for capital growth. For buyers, location is one of the most critical of the many factors to consider. Working with a qualified financial advisor or buyer’s agent helps ensure a portfolio aligns with 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. It also recommends scheduling a consultation with a certified wealth management expert to explore prime Melbourne CBD apartments.
In short, the numbers behind Melbourne’s CBD tell a consistent story: 446,000 new arrivals in 2024, a 60% apartment supply deficit, rents up 9% in a year, and a $107 billion infrastructure plan reshaping the city. Together they show a market where demand is moving faster than supply.
If you found this breakdown useful, take a moment to subscribe to the channel and hit the like button. Turn on the notification bell too, so the latest updates land in your feed as soon as they are released.”
