A projection sits at the heart of the Melbourne CBD Market Outlook 2025: by 2032, Melbourne is expected to pass Sydney as the largest city in Australia, and by 2040 its population is forecast to reach 7.
45 million. The report uses that trajectory to argue that the central business district remains one of the most attractive property markets in the country. Population growth, major infrastructure projects, and strong rental demand all pull in the same direction. Anyone considering an investment there, it says, 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 write it. The aim 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 beyond.
Start with demand. Melbourne has posted steady population gains over the past decade, driven largely by Immigration. In 2024 alone, 446,000 new overseas arrivals came to the city, adding to the pressure on housing. The City of Melbourne estimates that 21,600 additional dwellings will be needed by 2028. The apartment pipeline covers only a fraction of that: just 8,900 new apartments are expected, which leaves a supply deficit of 60%. According to the report, this gap between supply and demand points to significant potential for price growth and rental returns on CBD apartments. It adds that 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 sat 56% below that of a detached house. That makes apartments a more accessible entry point for buyers chasing high rental yields, and it illustrates one advantage of buying an apartment instead of land.
Rents have moved upward too. The median weekly rent in the CBD reached $750 in November 2024, compared with $690 in 2023, a year-on-year rise of 9%. Vacancy stayed low, averaging 2.4% across 2024. Newly built CBD apartments delivered gross rental yields of 4.8%, which strengthens their appeal to investors.
Supply limits add a further layer. Room for new development inside the CBD grid is becoming scarcer, so existing apartments are likely to see significant capital appreciation. The report notes that constraints on new supply should lift capital values as demand continues to outrun what is available. 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 wider economy supplies a supportive backdrop. As of late 2024, Australia’s unemployment rate stood at 4.0%, well under the 10-year average of 5.3%, a sign of a resilient economy. Consumer confidence has Improved as well: the ANZ-Roy Morgan Index gained 12 points year-on-year to land at 86.4 in December 2024. Inflation, for its part, dropped to 2.8% in September 2024. Taken together, these trends 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 lower the cost of loans 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 rely on mortgage broker services or commercial real estate loans.
Infrastructure forms the other pillar. A series of major projects, all part of Victoria’s $107 billion infrastructure plan, reinforces Melbourne’s liveability and its draw as an investment destination.
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 give 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 link 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 bring new public spaces, restaurants, and activities 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.
According to the report, this wave of investment enhances Melbourne’s global appeal and drives long-term growth in property values. For astute investors, it says, proximity to these transport networks correlates directly with higher tenant retention and sustainable capital appreciation.
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. The scarcity of new developments inside the CBD grid sharpens that appeal, because existing apartments are positioned for capital growth. For buyers, location is one of the most critical of the many factors to weigh. 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, and it recommends scheduling a consultation with a certified wealth management expert to explore prime Melbourne CBD apartments.
Boiled down, the figures tell one consistent story: 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 moving faster than supply.
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