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Top Melbourne Suburbs for Rental Growth

8 Apr 2025
Insights
Urbis Urbis Newsroom

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Residential
8 Apr 2025

With Melbourne’s rental market’s recent considerable growth, we’ve forecast which suburbs will continue to outpace the average.

Rents in Melbourne averaged $550 per week in Q4 2024, a notable 10.0% increase over the previous year and building on annual of 19.0% for the year prior. Well above the historical long-term average of 4.0% over the past decade.

A lack of new supply and an exodus of investors from the market at a time when population growth is at an all-time high, has resulted in tight vacancy rates and an increase in rents. As supply continues to be constrained by feasibilities, and other macro-economic instabilities, the dynamics are unlikely to change quickly, and many areas will continue to see strong rental growth.

Leveraging our in-house, small area forecast model, we’ve looked across Melbourne to see where the pressure is greatest.

So where are the hotspots?

Top 3 rental growth areas over the next few years.

Units – Hadfield (+7.2% – 8.2% per year), Malvern East (+6.7% – 7.7% per year), and Docklands (+6.5% – 7.5% per year).

Houses – Armadale (+7.1% – 8.1% per year), Kew – South (+6.4% – 7.4% per year), and Toorak (+6.3% – 7.3% per year).

As Inner Melbourne becomes increasingly expensive, some renters will seek more affordable options, turning their attention to Middle and Outer Melbourne. This shift will create new opportunities and challenges for investors, developers, and policymakers alike.

In a market where feasibility is the biggest challenge to delivery, understanding trends in rents and prices enables better strategic planning and investment decisions.

If you’d like to hear more about our small area forecast model and how the market is performing, please get in touch.

Top 5 Areas for Houses and Unit Rent Growth

Across Inner, Middle and Outer Melbourne

Inner Melbourne

 

Top 5 – Houses

FY25-27 p.a.

$ Change

1.

Armadale

7.1% – 8.1%

~$255

2.

Toorak

6.3% – 7.3%

~$275

3.

St Kilda East

6.0% – 7.0%

~$185

4.

Fitzroy

5.9% – 6.9%

~$185

5.

Malvern – Glen Iris

5.9% – 6.9%

~$210

 

 

Top 5 – Units

FY25-27 p.a.

$ Change

1.

Malvern East

6.7% – 7.7%

~$125

2.

Docklands

6.5% – 7.5%

~$115

3.

Elwood

5.9% – 6.9%

~$115

4.

St Kilda East

5.8% – 6.8%

~$105

5.

St Kilda – Central

5.7% – 6.7%

~$105

 

Middle Melbourne

 

Top 5 – Houses

FY25-27 p.a.

$ Change

1.

Kew – South

6.4% – 7.4%

~$215

2.

Kew – East

6.2% – 7.2%

~$210

3.

Kew – West

6.0% – 7.0%

~$205

4.

Brunswick West

6.0% – 7.0%

~$150

5.

Pascoe Vale South

5.8% – 6.8%

~$135

 

 

Top 5 – Units

FY25-27 p.a.

$ Change

1.

Hadfield

7.2% – 8.2%

~$105

2.

Northcote

6.5% – 7.5%

~$115

3.

Oakleigh – Huntingdale

6.3% – 7.3%

~$125

4.

Braybrook

6.3% – 7.3%

~$95

5.

Coburg – West

6.2% – 7.2%

~$105

 

Outer Melbourne

 

Top 5 – Houses

FY25-27 p.a.

$ Change

1.

Dandenong – North

5.8% – 6.8%

~$120

2.

Noble Park

5.6% – 6.6%

~$100

3.

Springvale

5.6% – 6.6%

~$110

4.

Noble Park North

5.4% – 6.4%

~$95

5.

Dandenong – South

5.3% – 6.3%

~$110

 

 

Top 5 – Units

FY25-27 p.a.

$ Change

1.

Noble Park

6.2% – 7.2%

~$95

2.

Noble Park North

6.2% – 7.2%

~$95

3.

Springvale South

6.0% – 7.0%

~$100

4.

Springvale

5.9% – 6.9%

~$100

5.

Rosebud – McCrae

5.9% – 6.9%

~$100

 

Benchmarks

Houses

FY25-27 p.a.

$ Change

Greater Melbourne

4.1% – 5.1%

~$85

 

Units

FY25-27 p.a.

$ Change

Greater Melbourne

3.7% – 4.7%

~$70

 

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