• Inner-City apartments values continue to recover, with median Inner-City apartments prices having increased for three consecutive quarters;
• Transactional activity for apartments in the Inner-City region was strong in 2025, with more than 7,200 sales, its most active year since 2015 and 42% higher than the 10-year average
• While there were 2,700 new apartments completed in the Inner-City Melbourne market over 2025, new supply remains below its long-term annual average of 3,600.

Inner-City Melbourne Apartment Summary

Transactional activity for apartments in the Inner-City region was strong in 2025, with more than 7,200 sales, its most active year since 2015 and 42% higher than the 10-year average for annual apartment sales. Most transactions were focused on Southbank and CBD-Core located apartments which collectively accounted for 56% of all sales. Inner-City apartments values continue to recover, with median Inner-City apartments prices having increased for three consecutive quarters. Inner-City apartments prices increased by 2.0% to $656,500, their highest value since the peak of December 2021.

Prices

Inner-City apartments values continue to recover, with median Inner-City apartments prices having increased for three consecutive quarters. According to the REIV, over the December quarter Inner-City apartments prices increased by 2.0% to $656,500, their highest value since the peak of December 2021. Over 2025, values of 2-bedroom, 3-bedroom Inner-City apartments increased while 1-bedroom Inner-City apartments values remained steady through the year. As at December 2025, values of 1-bedroom Inner-City apartments sit at $380,000 with 2-bedroom Inner-City apartments median prices increasing by 0.8% over the year to $635,000. Inner-City 3-bedroom apartments recorded the strongest annual rise, increasing by 1.7% to reach $1.13 million. With a solid rental growth outlook coupled with a constrained pipeline, Urban Property forecasts that values of Melbourne Inner-City apartments will continue to trend up in the short term.

Supply

Currently there are 6,200 apartments under construction within the Inner-City Melbourne region. Urban Property Australia research recorded 2,700 new apartments completed in the Inner-City Melbourne market over 2025, a 69% increase on the completions recorded in the previous year. Over the past 20 years, on average, there have been 3,600 new apartments delivered to the Inner-City Melbourne market each year. Of the 27 new developments currently under construction, 51% of the apartments are located in the Docklands, followed by 25% located in the Southbank precinct and 12% located in Kensington. The vast majority of the pipeline of new apartments for the Inner-City currently under construction are within the build-to-rent sector in contrast to the built-to-sell sector. Looking ahead, while there are a further 22,200 apartments with plans approved in the Inner-City Melbourne region, Urban Property Australia’s research forecasts that new apartment supply in the Inner-City Melbourne precinct is projected to remain below the average annual levels for the next five years despite the near all-time record population growth with elevated construction and financing costs continuing to challenge new development.

Inner Melbourne New Apartment Supply

Demand

Transactional activity for apartments in the Inner-City region was strong in 2025, with more than 7,200 sales, its most active year since 2015 and 42% higher than the 10-year average for annual apartment sales. Most transactions were focused on Southbank and CBD-Core located apartments which collectively accounted for 56% of all sales followed by those located in the Docklands and Carlton which accounted for 10% and 8% respectively of the total Inner-City apartments sold in 2025. Urban Property Australia’s research indicates that transactional activity in the Inner-City apartment market is expected to remain above average levels, driven by rising investor demand and record-high rental rates. However, this growth may be tempered by a constrained supply of new apartments.

Annual Inner Melbourne Apartment Sales

Vacancy

The Inner City’s population has now recovered to, and exceeded, pre-COVID levels with more than 190,000 residents in the precinct. According to the REIV, as at November 2025, the residential vacancy rate for the Inner-City precinct (0-4km radius of the GPO) was 2.4%, having decreased over the past 12 months, supported by the limited supply pipeline. Looking ahead, with new development continuing to remain difficult to progress to construction phase, Urban Property forecasts that the vacancy rates for the Inner Melbourne precinct will continue to remain below its long-term average of 3.3%.

Rents

Despite increasing affordability pressures, Melbourne Inner-City apartment rents remain close to all-time high levels supported by the hampered development pipeline. As at December 2025, median Inner Melbourne apartment rents were $600 per week, having increased by 5.3% over the year, according to the REIV. Over 2025, average rents for all sized-bedroom apartments in the Inner-City precinct rose by at least 3%, led by 2-bedroom apartments which increased by 4.8% over the year. Rents for 1-bedroom Inner Melbourne apartment rents increased by 4.2% over the year with rents for 3-bedroom apartments increasing by 3.6% over the year. Although Inner Melbourne rents are close to all-time highs, Urban Property Australia forecasts further rental growth boosted by the growing employment levels in the CBD which is projected to increase by 13% in the five years to 2028.

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