Melbourne apartment completions to hit 10-year low in 2025

Only 771 apartments were completed in Inner Melbourne as of Q2.

In a report, JLL said apartment supply in Melbourne is projected to be at a 10-year low in 2025. As of Q2 there have been 771 apartment completions in Inner Melbourne, with a further 1,2600 expected to be completed by the end of the year.

“This will be a 53% reduction on the number completed in 2024 and 28% less than the previous low point in 2022. Construction cost-push with reduced realisation rates are delaying project commencements, compounding supply constraints,” the report added.

Here’s more from JLL:

Melbourne’s apartment market continues to face challenges with the median sale price seeing small, yet negative growth at 0.2% year-on-year to Q2 2025 however the median sale price of $610,000 has remained relatively stable since Q2 2023.

Median apartment rental growth continues to slow into Q2 2025, however is still positive with the median apartment rents increasing 3.0% year-on-year. Melbourne continues to have the highest vacancy rate amongst the capital cities with rental vacancy currently at 1.7%.

Apartment rents are still seeing growth, providing some confidence to investors

While prices have remained stable, the volume of apartment sales has increased year-on-year and is well up on pre-COVID volumes. The cash rate cut in Q2 2025, and stable pricing is making it easier for firsthome buyers to enter the market with confidence, supporting these sales volumes.

Investors will also be enticed into the apartment market with increased returns due to rental growth, underpinned by a subdued supply outlook.

Outlook

Further reductions the cash rate through the remainder of the year and into 2026 will support buyer confidence, with the expectation this will lift market activity and may begin to see movement in capital growth.

Supply pressures are likely to be felt out towards 2030, however there are development projects that have been approved and could be brought forward to meet demand, especially build-to-rent projects for the rental market.