Melbourne renters face rising costs and limited options as rental prices rise and the city’s affordability crisis deepens.
According to the latest PropTrack data, the average advertised rent across Melbourne increased by $15 per week in the March 2025 quarter – the first increase in six months – bringing the average weekly rent to $575. This marks a 2.7% increase in just three months, translating to an additional $780 per annum for renters.
City apartment rents rose 3.6% to $570 per week, narrowing the gap between unit and house rents to just $10. House rents remained steady at $580.
Experts say strong population growth, high immigration and a shrinking pool of rental housing are driving the rise in rents. “Victoria has led the country in net interstate and international migration,” said REA Group senior economist Anne Flaherty. “At the same time, Melbourne lost a net 22,000 rental properties last year due to sales by investors.”
The result is a tight market and rising prices, particularly for smaller, once affordable homes. “We are absolutely at the beginning of a new growth cycle,” Flaherty warned, noting that rental supply is failing to keep up with demand.
Despite rising rents, investor confidence remains shaken. Webb said landlords are still leaving the market, citing concerns about legislation, land tax and regulatory compliance costs.
National Shelter chief executive Karen Walsh said the impact is hitting low- and middle-income renters the hardest. “People are paying more than half their income for rent, skipping basic medications and relying on food banks,” she said.
Walsh called for urgent investment in social and affordable housing, warning that Victoria is already short of 640,000 homes. “Melbourne’s affordability is eroding fast,” she said. “We need action, not more waiting.”
