The Melbourne housing market 2025 is quietly entering a new phase.
While headlines talk about a modest recovery in premium suburbs, the more meaningful story is unfolding in the city’s affordable belts.
Here, price growth, yield and rent momentum are intersecting to create genuine opportunity for long term investors.
Where Demand Is Building Beneath the Surface
Across the outer east, north and south eastern corridors, family sized houses are posting rent increases of around 10 to 15% a year with vacancy rates close to zero.
Supply is thin, demand is broad, and properties are leasing within days.
That rental tension is flowing through to prices as buyers compete for limited listings.
- Outer east resilience: Croydon, Mooroolbark, Rowville and Chirnside Park are recording rental pressure with consistent yields near 4%, an unusual mix for established zones.
- Northern affordability: Broadmeadows, Epping and Lalor remain well priced relative to the city median and are seeing price growth around 10 to 13% a year with yields above 4%.
- South east expansion belt: Pakenham and Koo Wee Rup continue to attract owner occupiers and investors, combining population growth, low stock and rental increases exceeding 12% in some cases.
Key Performance Indicators In The Melbourne Housing Market 2025
The table below summarises representative suburbs showing the blend of rising prices, low vacancies and income strength evident across Melbourne’s outer housing markets.
| Suburb | Indicative House Price Growth (1 yr) | Gross Yield | Vacancy Rate | Investor Insight |
|---|---|---|---|---|
| Rowville 3178 | +14.5% | ≈ 4.0% | ≈ 1% | Family market with strong rental depth and limited new supply. |
| Broadmeadows 3047 | +11.7% | 4.1% | < 1% | Affordable entry point with rental demand supported by transport links. |
| Koo Wee Rup 3981 | +11.0% | 4.5% | 0% | Population growth and zero vacancy create yield stability. |
| Pakenham 3810 | +8.9% | 4.2% | ≈ 1.6% | Consistent turnover with a strong tenant pipeline from new estates. |
| Mooroolbark 3138 | ≈ 6% | 4.3% | < 1% | Tight stock, family housing and steady owner occupier inflows. |
| Chirnside Park 3116 | +9% | 4.7% | ≈ 0.7% | One of the outer east’s most balanced yield and growth markets. |
Vacancies At Historic Lows
Rental availability across Melbourne’s detached housing market is now among the tightest in Australia.
In several outer municipalities, the effective vacancy rate sits below 1%.
This shortage has reduced rental days on market and lifted weekly rents by double digits within a year.
For investors, that represents authentic demand rather than speculative churn.
Investor Takeaways
- Target yield supported corridors. Outer east and northern belts combine income resilience with gradual capital gains.
- Watch affordability tiers. Suburbs below the $800,000 median remain in structural demand from both tenants and buyers.
- Prioritise infrastructure access. Train connectivity, employment hubs and schools continue to underpin rent strength.
- Balance short term yield with long term growth. The most durable opportunities sit where cash flow and lifestyle appeal overlap.
For more perspective, see our latest market insights or speak with our buyer’s agents for suburb specific shortlists.
Market Context And References
Recent reports confirm these shifts within the Melbourne housing market 2025.
The SQM Research National Vacancy Rates April 2025 shows a tight rental environment across the capitals including Melbourne.
The JLL Residential Market Report Melbourne Q2 2025 provides current data on rents, vacancies and buyer activity.
For a wider view on values and supply, the Urban Property Australia Melbourne Residential Market Q2 2025 summarises price movements, building activity and demand drivers.
Final Outlook
The Melbourne housing market 2025 is defined by balance and steady progress.
Markets showing price momentum and yield above the city average are largely in family oriented corridors with real housing scarcity.
Investors focusing on these fundamentals, including yield, vacancy and value, are positioning ahead of the next sustained growth phase.