Melbourne New Apartment Market Report | Spring 2026

The Melbourne new apartment market enters Spring 2026 amid constrained future supply, rising apartment values and ongoing rental demand. While new apartment prices continue to increase, the development pipeline has fallen significantly below historical levels, reflecting reduced construction activity and lower apartment approvals. Population growth and limited housing availability continue to support demand, while tight rental conditions underpin the attractiveness of new apartment living across Melbourne.

Market snapshot

Melbourne's new apartment pipeline is projected to deliver 20,338 apartments between 2026 and 2029, averaging 5,085 completions per year. This remains 63% below the five-year average, making Melbourne one of the most supply-constrained apartment markets among the major capitals. In 2026, approximately 4,014 new apartments are expected to be completed. Two-bedroom apartments account for 39% of future supply, while 33% of projects are planned as three-bedroom apartments.

New apartment prices

New apartment prices across Melbourne increased 7.2% over the year to Q2 2026, with a further 0.7% rise during the quarter. The indicative average value reached $14,900 per square metre, with prices ranging from approximately $9,000 to $21,500 per square metre across the city. Melbourne's inner suburbs recorded the strongest annual price growth at 7.7%, highlighting ongoing demand for well-located apartment stock.

Residential property market

Melbourne residential property values have remained relatively stable despite recent market softness. Median residential prices increased 0.4% over the year to Q2 2026 to reach $851,600, although values declined 2.4% in the most recent quarter. Looking ahead, McGrath Research forecasts Melbourne residential property prices will decrease by 7% by the end of 2026 before returning to growth with a projected 2% increase in 2027.

Rental market performance

Rental conditions remain undersupplied across Melbourne, with vacancy rates recorded at 2.7% in Q2 2026. Median rents increased 1.7% over the year to $585 per week, while apartment rents outperformed house rents. McGrath Research forecasts Melbourne rents will rise by a further 4% by the end of 2026 and 5% in 2027 as rental demand continues to outpace supply.

Economic drivers

Several factors continue to influence Melbourne's apartment market. Population growth reached 2.0% in 2025, while apartment approvals declined 13.1% and new home construction activity remained below year-ago levels. Building costs increased 5.0% during the year, contributing to ongoing development challenges and reinforcing future supply constraints. These factors continue to support demand for quality new apartment stock across Melbourne.

Outlook for Melbourne new apartments

Melbourne's new apartment market is expected to remain defined by limited future supply and steady demand. While broader residential property prices are forecast to soften in the short term, the significant reduction in apartment completions, ongoing population growth and continued rental demand are expected to support the new apartment sector over the longer term. Explore the full Spring report for detailed insights into apartment supply, pricing, rental performance and the economic drivers shaping Melbourne's new apartment market.