For years, Melbourne apartments have been overshadowed by the housing market. Oversupply concerns, pandemic-driven lifestyle shifts, and lacklustre investor confidence meant many apartments were overlooked in favour of standalone homes and townhouses.
As buyer advocates at Industry Insider Property, we’ve seen first-hand the renewed appetite from first-home buyers and investors seeking high-quality apartments in tightly held locations. And unlike the frenzy of years past, today’s buyers are informed, cautious, and focused on fundamentals.
Here are the red flags to watch out for when buying an apartment.
🚩 Too small internally, poor layout or cramped living space.
🚩 Lack of natural light, windows only facing south or in one direction!
🚩 Overshadowing from other buildings and no sunlight into the living spaces.
🚩 Privacy issues, direct line of sight into or from neighbouring apartments
🚩 No functional outdoor space, with balconies that are too small or non-existent.
🚩 Poor ventilation, no windows in key areas like bathrooms or kitchens.
🚩 High owners corp fees, with no real value to show for it!
🚩 Hidden issues found during due diligence, ranging from building defects to poor financials and owner’s corporation issues.
🚩 Higher Rate of Renters vs. Owner-Occupiers.
🚩 Main roads with noise issues.
After a Long Period of Underperformance, Are Melbourne Apartments Making a Comeback?
Melbourne’s apartment sector is quietly regaining ground. Suburbs once dismissed as ‘stagnant’ are recording solid gains, fuelled by strong rental demand, tightened supply, and improved affordability relative to interstate markets like Brisbane and Adelaide.
We’re seeing more multiple-offer situations, especially for renovated, well-located stock in boutique buildings. This shift isn’t speculative; it’s a strategic move. In June, we secured two high-quality entry-level apartments for our investor clients, one in Toorak and another in Elwood, both of which attracted strong competition. These purchases are a clear indication of where the smart money is likely to go.
Apartment at 5/27 Wallace Avenue, Toorak 3142
- Price guide $760,000–$835,000
- Method of Sale – Private Sale
- We purchased it for $809,000
- Competition: 2 other buyers.
- Rental Estimate: $700 – $750 per week
This 2-bedroom apartment offered the rare trifecta: a premium Toorak address, tasteful renovations, and secure parking. Located near Como Park and Toorak Village, it ticked the lifestyle and convenience boxes for both renters and owner-occupiers. Investors recognised the value and competed strongly, a clear sign of the confidence returning to this segment.
Apartment at 5/24-26 Milton Street, Elwood 3184
- Price guide $700,000–$750,000
- Method of Sale – Private Sale
- We purchased it for $766,000
- Competition: 5 other buyers
- Rental Estimate: approximately $750 per week
Elwood has always been a magnet for lifestyle-driven buyers. This bright, spacious apartment was within walking distance of the beach, cafés, and Elwood Village. Well-maintained with a functional layout and with its northwest-facing courtyard, it offered an ideal entry point into a blue-chip bayside location. Again, we saw investor competition heat up. A property we feel is inferior just sold for $820,000 at 3/130-132 Mitford Street, Elwood, Vic 3184.
Why Investors Are Stepping Back In
- Affordability – Melbourne units are now more affordable than those in several other capital cities.
- Yield advantage: Strong rental returns and tight vacancy rates are making the numbers stack up.
- Limited-quality stock: Many low-quality developments from the last decade have led to a ‘flight to quality’. Investors want well-built, low-maintenance properties with long-term upside.
- Interest rate sentiment: With rate cuts tipped for late 2025, some are getting ahead of the curve.
Our View
We’re not calling it a boom, but we’re seeing a measured, quality-driven recovery. For investors with a long-term lens, the Melbourne apartment market is once again worthy of consideration, provided the right property is chosen.
If you want to know where the market is heading, take time to read our BLOG UPDATE.
If you’re looking to make a move or reassess your investment strategy, we can help identify the right opportunities.
Industry Insider Property is an independent and committed company dedicated to helping buyers and sellers achieve their desired outcomes. Our experienced buyer agents and advisors will guide, execute, and deliver the best possible results to our clients. That’s why we have over 303+ 5-star Reviews on Google!
Our team will help you save time and share over 40 years of industry knowledge and expertise to ensure you make an informed decision.
Contact us at +613 8374 7652 or email us at admin@industryinsider.com.au to discover how we can assist you in your real estate journey.
Industry Insider Property
Level 3, 489 Toorak Road, Toorak 3142
+613 8374 7652
+613 402 346 810
industryinsider.com.au
