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What Is the Average Cost of an Apartment in Melbourne?

November 28, 2023
What Is the Average Cost of an Apartment in Melbourne?

Key takeaways:

    • The average cost of an apartment in Melbourne is $596,413.

    • Prices can vary based on factors such as size, location, and development type.

    • Melbourne is known for being one of the most expensive cities to live in.

Are you considering a move to Melbourne? Before making any decisions, it’s important to understand the cost of living in this vibrant Australian city.

One of the most significant expenses you’ll encounter is housing, particularly if you’re looking to buy an apartment. Melbourne is known for its high housing prices, making it crucial to have a clear understanding of the average cost of an apartment in this city.

The median price for an apartment in Melbourne is around $509,000, reflecting the dynamic housing market of the city. This figure has grown quite consistently over the past decade year on year, showing the increased interest in units over houses.

Buying an apartment in Melbourne is not only a financial decision but also one that impacts your lifestyle. Whether you’re looking for a one-bedroom apartment in the inner city or a larger unit in the suburbs, understanding the average cost of housing is a crucial starting point.

Average Cost of an Apartment in Melbourne

Size of unitMedian price by Bedrooms
1 Bedroom
$365,000
2 Bedrooms
$595,000
3 Bedrooms$850,000
REIV

5 Factors to consider when buying an apartment in Melbourne

Urban Property Australia’s insights for Q3 2023 show that Inner-City Melbourne’s median apartment prices have increased by 1.9% over the September quarter. This growth follows a year of declining values, suggesting a trough in prices with a positive outlook for the near future.”

The report also notes that the demand for apartments has remained strong throughout 2023, supported by factors like immigration and interest from first-time home buyers

When purchasing an apartment in Melbourne, it’s important to take into account various factors that can greatly influence your decision. These factors include the size and layout of the apartment, the potential of the suburb it is located in, and the overall development of the apartment complex.

1. Apartment size and layout: 

Consider the size of the apartment and how well it suits your needs. Think about the number of bedrooms and bathrooms, as well as the living space available. Additionally, the layout of the apartment should be practical and functional for your lifestyle.

2. Location and potential: 

The location of the apartment is crucial. Melbourne offers a diverse range of suburbs, each with its own unique charm and amenities. Research the suburb and consider its potential for growth and development.

Look into the local infrastructure, transport options, schools, and community amenities to ensure they align with your lifestyle and future needs. Understanding the rental percentage in the area can also be informative, especially if you’re considering an investment property.

3. Apartment development: 

Take the time to research the development of the apartment complex. Look into the reputation of the developer, the quality of construction, and any additional facilities or services offered.

This can include things like a gym, rooftop terrace, or concierge services. Understanding the development will give you insight into the long-term value and livability of the apartment.

4. Consulting a real estate agent

It is highly recommended to consult with a knowledgeable real estate agent who specializes in the Melbourne market. They can provide valuable insights and advice based on their expertise and experience.

A skilled agent will help you navigate the complexities of the Melbourne property market and assist you in finding the ideal apartment that meets your criteria.

5. Considering future developments

When buying an apartment, it’s crucial to consider future developments in the vicinity. Find out if there are any planned infrastructure projects or significant developments that could impact the value and livability of the area. This information will help you make an informed decision and avoid any potential issues down the line.

By taking into consideration these factors and conducting thorough research, you can make a well-informed decision when purchasing an apartment in Melbourne. Remember to prioritize your needs, lifestyle, and long-term goals to find the ideal property that meets your requirements.

Liveable and Investment-Worthy Suburbs in Melbourne

Melbourne offers a range of suburbs that are not only liveable but also present excellent investment potential. These suburbs have been carefully evaluated based on various factors such as access to services, health facilities, educational institutions, and community centers.

According to the 2023 Australian Liveability Census by Place Score, the most liveable suburbs in the Greater Melbourne area include Bayside in the inner southeast, Darebin in the inner north, and Stonnington in the inner east.

“Boroondara, encompassing the eastern suburbs of Kew, Camberwell, and Hawthorn, also ranks highly in liveability.”

For those looking to invest in property in Melbourne, you can consider suburbs like North Melbourne, Melton South, Roxburgh Park, Richmond, Sunbury, Caroline Springs, Epping, Hoppers Crossing, Forest Hill, and Glen Waverley. These suburbs have shown strong rental yields and have the potential for future growth.

Investing in a property in one of these liveable and investment-worthy suburbs can be a wise decision, offering both a comfortable lifestyle and the opportunity for long-term financial gains.

However, it is important to conduct thorough research and seek expert advice to ensure you make an informed decision that aligns with your investment goals.

Is Rent Increasing in Melbourne?

Understanding the rental market trends is crucial for investors. Recent data raises the question, is rent increasing in Melbourne? This information can be vital for those considering an investment property in the city.

Conclusion

Buying an apartment in Melbourne requires careful consideration of various factors. The average cost of an apartment in Melbourne is $596,413, but this can vary depending on size and location. It’s important to assess the liveability and investment potential of different suburbs before making a decision.

Melbourne offers a range of suburbs that offer both liveability and investment potential. The investment potential and liveability of suburbs such as Bayside, Darebin, Stonnington, and Boroondara should be considered, given their high liveability scores in recent surveys

When choosing an apartment, it’s essential to be aware of potential risks. These may include negative equity, small floor plans, high body corporate fees, poor capital growth, location issues, and low rental yields. Conducting thorough research and consulting with real estate professionals can help mitigate these risks and make an informed decision.

For those interested in exploring further options, real estate to rent in Melbourne offers a variety of choices to consider.

Ultimately, buying an apartment in Melbourne requires careful consideration of the Melbourne property market, factors such as liveability and investment potential, and potential risks. By taking the time to gather information and weigh the options, buyers can navigate the apartment buying process with confidence.

FAQs on ‘What Is the Average Cost of an Apartment in Melbourne?’

1. Is It Worth Buying an Apartment in Melbourne?

According to insights from the Melbourne real estate market, buying an apartment in Melbourne can be a worthwhile investment. Apartments in the city are known for being relatively affordable to purchase and offer cost-effective living.

They are typically low-maintenance, located close to essential amenities and infrastructure, and provide easy access to high-paying job opportunities. However, to ensure a successful property ownership journey, making informed decisions pre-purchase is crucial.

2. What is the Typical Cost of Living in Melbourne?

As reported on January 10, 2023, the average cost of living in Melbourne, Australia, for a single person is around $2,500 per month. This estimate includes expenses for housing, food, rent, transportation, entertainment, and other amenities.

For a more modest lifestyle, an individual can live in Melbourne with a budget of AUD 1500-2000 a month. Basic living costs include around AUD 700/month for rent, AUD 100 for prepaid balance, and AUD 200–300/month for public transport.

3. Why are Melbourne Apartments So Cheap?

The relative affordability of Melbourne apartments compared to other cities like Sydney is attributed to Melbourne’s higher rate of apartment development, especially in the inner city. According to Wiltshire’s analysis, Melbourne has committed to more apartment developments, resulting in lower prices.

Additionally, regulations in Melbourne, particularly those limiting building heights, are less stringent than in Sydney, further contributing to the affordability of apartments in Melbourne.

4. What are the Pitfalls of Buying an Apartment?

When considering purchasing an apartment, there are several drawbacks to be mindful of. Common cons include limited parking, with many apartments, especially smaller units, not offering dedicated parking spaces.

Another factor is the limited space, as apartments are generally smaller than houses, which contributes to their affordability. Privacy and noise can also be concerns in apartment living. Additionally, buyers must consider strata or owners’ corporation by-laws, which can impose restrictions and additional responsibilities on apartment owners.

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Soho is your expert team in Australian real estate, offering an innovative platform for effortless property searches. With deep insights into buying, renting, and market trends, we guide you to make informed decisions, whether it's your first home or exploring new suburbs.
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