Melbourne’s Rental Market in 2025: Vacancy Rates, Hotspots, and Market Trends
Melbourne’s Rental Outlook for 2025: Competitive Yet Evolving
In 2025, Melbourne’s rental market continues to demonstrate strong demand, even as vacancy rates differ widely across its suburbs. With supply constraints and increasing population pressures, both investors and renters face a fiercely competitive environment.
Key Rental Insights for Melbourne (2025)
Vacancy Rates: Ranging between 1.2% and 2.5% across metro Melbourne
Market Benchmark: A balanced rental market is around 3%, highlighting robust overall demand
Suburb-Specific Vacancy Trends
Suburb
Vacancy Rate (%)
Notes
Hawthorn East
3.59
Softer demand, rents declining
Maribyrnong
3.49
Higher vacancies
Avondale Heights
3.4
Softer market
Armadale
<2
Tight market, rising rents
Toorak
<2
Strong rental growth
St Kilda East
<2
High demand
Fitzroy
<2
Competitive rental zone
Rental Prices: The median rent is roughly $580/week for houses and $550/week for units.
Annual Rent Growth: Hotspot suburbs like Armadale, Toorak, and Fitzroy are witnessing increases of 6–8%.
What’s Driving the Market?
Population Growth & Migration: A rebound in international students and new residents is fuelling demand.
Limited Supply: Developers are finding it difficult to match the growing market demand.
Households Sharing: More people are renting together to manage rising living costs.
National Vacancy Rate Snapshot (March 2025)
City
Vacancy Rate (%)
Hobart
0.5
Perth
0.6
Adelaide
0.6
Brisbane
0.9
Darwin
0.8
Sydney
1.3
Melbourne
1.5
Canberra
1.5
National Avg
1.1
Although Melbourne’s market is tighter compared to cities like Sydney and Canberra, it remains more accommodating than most other Australian capitals.
Final Thoughts
Melbourne’s rental environment is vigorous and competitive, yet it varies greatly from suburb to suburb. Detailed, suburb-specific insights are invaluable for investors looking to maximize returns in an ever-shifting market.
Interested in identifying Melbourne’s top rental suburbs?
Start your journey now at chat.investorprofile.com.au.
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