Melbourne apartment completions fall to 10-year low in 2025

But the pipeline is set to rebound in 2026.

Melbourne’s inner-city apartment market recorded its lowest level of new supply in a decade in 2025, with just over 2,000 units completed across the precinct, according to a report from JLL.

The property consultancy said the figure marks a 10-year low for inner-city completions, reflecting the slower development pipeline that has emerged following several years of challenging construction and financing conditions.

However, JLL expects supply to rebound in the near term. The firm forecasts nearly 4,000 apartments will be completed in 2026 from projects already under construction, signalling a temporary lift in new stock entering the market.

Pricing across Melbourne’s apartment market remained largely unchanged throughout 2025. JLL said the median apartment sale price finished the year at about $615,000 and has remained broadly stagnant since early 2023. House prices across the city also showed similarly flat growth over the same period.

Rental growth was modest in comparison. Apartment rents increased 3.6 per cent year-on-year in the second half of 2025, while median house rents declined 0.9 per cent, according to JLL.

Despite stable pricing, transaction activity has remained relatively strong. JLL said improved affordability and easing interest rates have supported first-home buyer demand, while Melbourne continues to record the highest rental vacancy rate among Australian capitals at around 2.0 per cent in the December quarter.

Looking ahead, JLL said Melbourne’s relative affordability compared with other major cities should help sustain buyer demand and could place upward pressure on apartment prices in the medium term. However, while the longer-term pipeline appears sizeable, many projects remain at the planning stage, with current market conditions delaying construction starts and potentially limiting future supply.