Investors return to Melbourne off the plan apartment market as buyers lean towards three-bedroom homes: Urbis
Both buyer demographic and buyer preference is shifting across Melbourne, the recently released Apartment Essential Snapshot by research giant Urbis found.
Data showed 40 per cent of purchasers over the June quarter were investors, closer to levels observed in 2021 and 2022, rather than the last two years. Investors are no doubt driven by lower interest rates, and the fact Melbourne has slipped to become one of the most affordable capital cities in the country.
Developers and project marketers are currently reporting a high number of interstate investors in particular across the board, who are priced out of the investment markets in Sydney and South East Queensland.
While investors showed signs they are back in the market in Melbourne, there has been an ongoing shift towards larger-scale apartments from developers, targeting the downsizer, a demographic relatively under serviced until recently.
Three-bedroom apartments are now being sought just as much as one-bedroom apartments, which is prompting a seismic shift in the make-up of new buildings.
Melbourne's off the plan apartment market has been buoyed by the abolition of stamp duty on new and off the plan apartments, which was extended earlier this year to October 2026. The concession allows buyers, including investors, to deduct construction costs from the dutiable value of the property, lowering entry costs and stimulating demand.
Also assisting in demand in the new space is the increased in demand, and turn around of price growth, in the established sector. Clearance rates in Melbourne improved five percentage points in the quarter, pointing to a greater appetite for the state to transact on property, an appetite that had waned in recent years.
Urbis noted that sales speeds are increasingly aligning across Sydney and Melbourne, with under-construction projects in particular securing quicker commitments from buyers. This suggests heightened confidence in delivery, despite ongoing construction industry uncertainty.
Pipeline lifts, but remains subdued
After several years of record lows, Melbourne’s apartment pipeline is beginning to recover.
Nationally, annual completions are forecast to rise to 23,350 apartments per year between 2025 and 2027, 21 per cent higher than the 2021–2024 average, but still 35 per cent below the 2016–2020 cycle.
Prices continue to trend upward
Pricing remains on a steady incline, with Melbourne in line with the national average of $16,400 per square metre. That figure reflects a 14 per cent annual increase and a consistent 10 per cent per annum growth since 2021, driven by rising construction costs and the market’s shift toward higher-value product.
While the overall supply pipeline remains materially below long-term averages, the Q2 figures suggest Melbourne is “creeping off the bottom.” Investors are returning, sales rates are accelerating, and developers are again lodging applications for larger projects.
Together, these trends indicate a market cautiously regaining balance between buyer demand and supply delivery.
Joel Robinson
Joel Robinson is the Editor in Chief at Apartments.com.au, where he leads the editorial team and oversees the country’s most comprehensive news coverage dedicated to the off the plan property market. With more than a decade of experience in residential real estate journalism, Joel brings deep insight into Australia’s evolving development landscape.
He holds a degree in Business Management with a major in Journalism from Leeds Beckett University in the UK, and has developed a particular expertise in off the plan apartment space. Joel’s editorial lens spans the full lifecycle of a project—from site acquisition and planning approvals through to new launches, construction completions, and final sell-out—delivering trusted, buyer-focused content that supports informed decision-making across the property journey