Interesting for: Seller, Buyer, Investor, Rental Provider, Renter
Melbourne’s property investment market has definitely showed signs of recovery to start 2025 after a somewhat turbulent ride over the last couple of years. Rates cuts, continued low vacancy rates, population growth and migration, and general confidence, are all factors that could see the second half of the year a booming one for current and future investors.
An unit market that is showing signs of life
Melbourne house prices rose every month to start the year (to June 2025), which is a very different tale to where the market has been the previous couple of years. According to PropTrack, in the month of May Melbourne outperformed all capital cities with a rise of 0.79% across all properties.
The unit market is thriving which is great news for investors. Units in Melbourne (as of May 2025) were 3.6% away from reaching record levels, which is vastly improved from the 5.6% number recorded at the very end of 2024.
“For a long time we have been trying to figure out when Melbourne will start its comeback and the fact that we have seen home values increase every month this year, that’s a really good sign that we are starting to see that recovery,” said Anne Flaherty, Senior Economist at the REA Group in an article in the Herald Sun. “Units are definitely seeing the best recovery,” added Ms Flaherty.
The suburbs where you might want to put your investment money
One of Australia’s leading financial comparison and analysis sites, Canstar, in June published an article where they highlighted 10 Melbourne suburbs to invest in in 2025. The list used data including suburb median prices, growth rates, vacancy rates, and median rental yields to help in creating a comprehensive list of Victoria’s most appealing investment spots.
In terms of house investing, Canstar noted Bayswater, Frankston North, and Heidelberg West as suburbs worth consideration. Bayswater was highlighted thanks to its affordability, plethora of green spaces including Doongalla Forest, and high rental growth (over 11% in the last year). Frankston North also has allure thanks to transport links (near M3 and M11 freeways) as well as elite 5-year capital growth.
On the unit side, Moonee Ponds, Preston, St Kilda, and Boronia were notable inclusions. Moonee Ponds makes the list due to its median price growth (bucking the general Melbourne trend) and excellent rental prices, while St Kilda is still very affordable on the unit side with a median price of $525,000 along with a median yield of 5.4%.
Affordable investment opportunities not far from the CBD
As all savvy property investors know, securing a home, a townhouse, or an apartment close to the city and vibrant lifestyle amenities is a recipe for success.
The Age recently published an article highlighting some of Melbourne’s top suburbs which have a median value of $1.3m and are located under 5 kilometres from Melbourne’s CBD. And while the top end of the list might price out many potential investors, the bottom end of the list makes for a more interesting story.
Footscray, with a median house price of $927,500 and a unit price of $480,000, sits towards the tail end of the list and represents an exciting opportunity for those with investment aspirations. Footscray has so many things going for it, including its bustling heart on Barkly Street which is lined with amazing restaurants, shops, and the iconic Footscray Market. The presence of Victoria University and the recent Whitten Oval redevelopment also adds to its appeal.
Maribyrnong also finds a place on the list not far from Melbourne’s city, and shines with access to beautiful parklands surrounding the Maribyrnong River and Highpoint Shopping Centre.
A booming population set to hit record highs
Those with a long term investing mindset need to look at a number of factors when it comes to property investment. And one of those factors is population growth.
According to the ‘Victoria in Future 2023’ report released by the Victorian Government, Melbourne is set to reach a population of 8 million people by 2050 (where it will likely overtake Sydney as the most populated capital city). Victoria as a whole will further edge closer to 10 million people this time. Factors to this booming growth include migration, job prospects, and education.
While it’s a simple formula, more people is a city means more accommodation needed to house everyone. Based on these projections, experts are predicting rental demand to remain very high, rent prices to continue to increase, and capital growth to continue on an upward trajectory. All these elements can only be a positive for those with an eye on property investment in Melbourne.
While the winter months traditionally see a quieter and more subdued real estate scene thanks to rainy days and chilly temperatures, all indicators are pointing to a continued rebound in the market across property sales and house prices.
The modern master bedroom has evolved far beyond the basics. No longer just a place to rest, it’s now a space to recharge, escape, and indulge.
The front facade of a period home does more than greet the street - it sets the tone for what lies beyond.
Wallpaper is staging a stylish comeback - and it’s more versatile and design-driven than ever.
All of our agents have the experience and local knowledge to guide you
Whether selling or investing, an appraisal of value will give you the confidence to make an informed decision
Switch to Woodards Property Management
