A flood of discount imports is killing inflation pressure
Australia’s short stay investment model is collapsing under regulation, cost, and policy pressure. Victoria’s 7.5% levy on short stay bookings is now in force. It applies to all bookings under 28 days on platforms like Airbnb and Stayz. Sydney enforces a 180 night annual cap in most council areas. Queensland councils are lifting rates and compliance barriers for Airbnb investors. Rising insurance premiums, planning controls, strata bans, and volatile seasonal income are pushing many investors out.
The numbers no longer stack up. What once looked like a passive income stream is now an over regulated, cost heavy business model.
The yield gap is closing. Airbnb is no longer the easy cash cow it once appeared to be.
How to Identify an Investment Grade Property in 2025
Only a small share of available properties qualify as investment grade in this cycle. These assets will outperform.
| Feature | Investment Grade Benchmark |
|---|---|
| Location | Walkable to shops, schools, transport, employment |
| Future Supply Risk | Minimal land release, protected zoning |
| Rental Demand | Suburb vacancy below 2% |
| Build Quality | Owner occupier standard, no maintenance red flags |
| Growth Profile | Long term median price performance above city average |
Do not chase off plan apartments, high rise towers, or fringe house and land stock.
Focus on assets in tightly held, undersupplied areas with strong local economies.
Melbourne’s Population Boom: The Data Investors Cannot Ignore
Melbourne is no longer a recovery story. It is a growth market. It has recorded the strongest population growth of any Australian capital in the 12 months to March 2025.
In the year to March 2025, Melbourne added 142,600 new residents, according to ABS. This was the largest absolute increase of any capital city and represents a 2.7% annual growth rate. The momentum is not short lived. It is backed by structural demographic drivers
| City | Net Growth | Annual Growth Rate |
|---|---|---|
| Melbourne | 142,600 | 2.70% |
| Sydney | 107,500 | 2.00% |
| Brisbane | 72,900 | 2.70% |
| Perth | 72,700 | 3.10% |
Net overseas migration is the dominant force behind this growth. Melbourne remains the preferred destination for skilled workers, international students, and returning expats.
The most underreported story in property today is how this growth is translating into demand. Melbourne’s vacancy rate is hovering below 1.1%, according to SQM Research. This is despite strong new dwelling completions, a signal that demand is outpacing supply even in an expanding market.
Investor attention is quickly shifting to high growth suburbs where infrastructure spending is locked in.
Key opportunity corridors include:
- Fraser Rise and Plumpton: Both recorded over 25% population growth in just two years.
- Rockbank and Thornhill Park: Supported by rail upgrades and schools now under construction.
- Mickleham and Kalkallo: Still affordable with direct access to key logistics hubs.
This is not just about population. It is about demographic composition. These suburbs are attracting high income, family oriented buyers and renters, not just transient tenants.
That profile supports stronger tenancy stability, lower maintenance, and more predictable capital growth.
Conclusion
Melbourne’s explosive growth is no longer speculative, it’s structural. But it’s not the only game in town. Perth and Brisbane are expanding at record speed, creating tight rental markets and opening investment windows in high-growth suburbs. The data is clear: population is fuelling demand faster than supply can keep up. Strategic investors are already moving.
This information is general and does not take your personal objectives, financial situation or needs into account. Consider obtaining independent advice before acting.
Next Step: Speak With a Strategic Property Advisor
At Rising Returns we specialise in helping investors navigate market cycles with precision.
Whether you are planning your next portfolio move, assessing property purchases, or reviewing your buyer’s agency agreement, our team can help you make the right decisions in a fast shifting market.
📞 Call us now or book a strategy session online to take advantage of this new policy landscape before competition intensifies.
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