Despite some recent fluctuations, Melbourne’s property market presents compelling opportunities for investors in 2025. While some forecasts suggest moderate growth (3% to 5% per annum), others are more optimistic, especially when comparing against interstate options that now appear much less appealing. Looking past short-term movements that have taken place over the last couple of years in Melbourne, the fundamentals remain strong. Melbourne’s median dwelling value is ranked sixth lowest among the eight Australian capital cities in CoreLogic’s Home Value Index (HVI) report published November 2024.
Why Consider Melbourne?
1. Affordability
Compared to Sydney, Brisbane and Perth, Melbourne offers more accessible entry points for investors, particularly in middle-ring and emerging growth suburbs.
2. Population Growth
Strong interstate and international migration continues to drive demand across Melbourne’s rental and property market.
3. Rental Demand
Vacancy rates are at historic lows, creating strong competition among renters and consistent rental yields for landlords.
4. Infrastructure Pipeline
Ongoing projects like the Westgate Tunnel Project, Metro Tunnel Project, Suburban Rail Loop and Melbourne Airport Rail Link will improve connectivity and boost property demand in new zones.
5. Diverse Housing Options
From period homes to modern apartments, Melbourne offers a wide range of opportunities for different strategies – whether you’re buying for capital growth, rental yield, or redevelopment.
Source Corelogic https://www.corelogic.com.au
Key Takeaway: Melbourne Delivers Value
Melbourne continues to offer value on a national scale, especially when factoring in land tax differences, as explored in our Victorian Land Tax Comparison Blog.
Compared to the high purchase prices and sharper land tax curves in Sydney and Brisbane, Melbourne remains one of the most attractive options for property investors in 2025.
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