Twenty-one thousand six hundred new dwellings.
That is how many the City of Melbourne projects its central business district, known as the CBD, will need by 2028. The current apartment pipeline holds just 8,900 units, so supply trails demand by 60%. A new research report puts that shortfall at the heart of its case for buying CBD apartments in 2025 and beyond.
The report was commissioned by Far East Consortium, one of Australia’s most respected Melbourne property developers. It hired Urbis to produce the Melbourne CBD Market Outlook 2025, hoping to gain a clearer picture of how the city’s property market functions, what motivates buyers, and where the economy is likely to go in 2025 and afterward. The material describes the CBD as one of Australia’s most attractive property markets, backed by population growth, transformative infrastructure, and strong rental demand. It adds that anyone entering the market should understand why CBD apartments have held up so well as an asset class.
The first pillar is population. The report expects Melbourne to pass Sydney as Australia’s largest city by 2032 and to reach 7.45 million residents by 2040. Immigration has driven strong growth over the past decade, and in 2024 alone the city took in 446,000 new overseas arrivals, adding to demand for housing. Weigh that against 8,900 planned apartments and 21,600 needed dwellings, and the report sees considerable room for price growth and rental returns on CBD apartments.
The author of the material says they have spent a decade analyzing property cycles. Clients, the author says, hear the same advice repeatedly: limited supply is the ultimate foundation for long-term capital appreciation. When demand outruns supply by this much, the author argues, urban real estate naturally commands premium valuations.
The second pillar is affordability. The material names price as one advantage of choosing an apartment over land. In 2024, the median CBD apartment price sat 56% below the median for a detached house, making apartments the more accessible option for buyers.
Rental figures point the same way. Median weekly rents in the CBD hit $750 in November 2024, compared with $690 in 2023, a 9% increase year-on-year. Vacancy stayed low, averaging 2.4% across 2024. Newly built CBD apartments produced gross rental yields of 4.8%, a figure the material says strengthens their appeal to investors.
Land is also running short. Openings for fresh developments inside the CBD grid are growing scarcer, which means existing CBD apartments are likely to see significant capital appreciation. The Melbourne CBD Market Outlook 2025 report notes that “constraints on new supply should lead to growth in capital values as demand continues to outpace supply”.
Government spending forms the next layer. Major infrastructure projects lift Melbourne’s livability and its pull as an investment destination, and the material highlights five of them.
The Melbourne Greenline, due in 2025, is a $224 million project that will reshape public spaces along the Yarra River. It creates a 4 kilometer route with Improved recreation and event opportunities. Also due in 2025, the West Gate Tunnel Project is a major road upgrade offering drivers an alternative to the West Gate Bridge. It is meant to ease congestion and Improve connectivity between Melbourne’s west and the CBD.
Scheduled for 2028, the North East Link is Victoria’s largest road project. It will join 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 Melbourne’s iconic market. It brings new public spaces, restaurants, and activities designed to draw residents and visitors. Planned for 2035, the Suburban Rail Loop is a rail project linking key suburbs. It is intended to shorten commutes and lift housing demand near transport hubs such as Clayton and Sunshine.
All five projects sit within Victoria’s $107 billion infrastructure plan. The material says the plan boosts Melbourne’s global appeal and drives long-term growth in property values. The author adds that, in their experience, values consistently climb faster in corridors directly touched by government capital expenditure.
The broader economy supplies the final piece. 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%, which the material reads as a sign of resilience. Consumer confidence has Improved significantly too: the ANZ-Roy Morgan Index rose 12 points year-on-year to 86.4 in December 2024. That sentiment, together with inflation easing to 2.8% in September 2024, has created a favorable climate for property investment.
Interest rates may add further support. Major banks, including ANZ and NAB, forecast rate cuts that are expected to lower borrowing costs and spur 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%, which would further Improve affordability for investors seeking Melbourne CBD apartments.
Pulling these threads together, the material argues that rapid population growth, transformative infrastructure, and strong rental performance give the Melbourne CBD an exceptional combination. The scarcity of new development inside the CBD grid adds to the appeal, since existing apartments are positioned for capital growth. Buyers in Melbourne have many factors to weigh, and the right location ranks among the most critical. For investors hoping to capitalize on the market’s robust dynamics, the material 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.
Strip it down, and the report’s case rests on a 60% supply gap, a population heading toward 7.45 million, rising rents, and a $107 billion infrastructure plan. What remains open is how quickly the city’s apartment supply can respond to demand on this scale.
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