Melbourne apartment supply to plunge to a 10-year low in 2025

The total completions for 2025 will only be half of 2024 levels. 

According to a JLL report, Inner Melbourne apartment completions in 2025 are projected to be at a 10-year low, however projected supply is positive towards the end of the decade being led by build-to-rent developments.

“Year to date there have been 846 apartment completions in Inner Melbourne, with a further 1,185 expected to be completed by the end of the year. This will be almost half the number of completions in 2024,” the report said.

Here’s more from JLL:

Melbourne’s apartment market continues to face challenges with the median sale price seeing a small dip of 0.7% year-on-year. One-bedroom apartments saw the largest year-on-year dip in price of 2.5%.

Median apartment price growth over a 10-year period now sits at 1.8% per annum. The median sale price of $610,000 has remained relatively stable since Q2 2023.

Apartment rents are still seeing growth, providing some confidence to investors and developers in the rental market

Median apartment rental growth continues to slow into Q2 2025, however is still positive with the median apartment rents increasing 1.8% year-on-year. Two-bedroom apartment rents continue to outpace the wider apartment market with year-on-year rental growth at 4.5%. Over a 10-year period, rents have outpaced sales growth with an average growth rate of 4.5% per annum over the period. Melbourne continues to have the highest vacancy rate amongst the capital cities with rental vacancy currently at 1.8%.

While prices have remained stable, the volume of apartment sales remains strong, fuelled by increasing market confidence and increasing affordability for first-home buyers especially. With lower current pricing levels and a growth outlook, investor activity will likely increase despite higher ownership costs.

Outlook

Melbourne’s relative affordability to other major Australian cities will likely see continued transactional activity in the sales market, especially with positive-growth prospects into the medium term. As this occurs, an uplift in capital values is expected.

The supply outlook is positive for build-to-rent apartments but constrained for build-to-sell developments. Lower supply in the apartment sales market may continue out towards 2030, but if price growth trends see an uptick development projects could be brought forward.