Yes, Melbourne’s unit market is gaining momentum. As affordability constraints push buyers away from houses, unit prices have begun outperforming houses, signalling a structural shift toward medium-density living in Melbourne.
Key Takeaways
- Melbourne unit prices outpaced houses in late 2025
- Affordability pressures are driving buyer demand toward apartments
- Growth is strongest in inner and middle-ring suburbs
- Rising prices may encourage new medium-density housing supply
- Larger, older-style units are favoured for long-term growth
Melbourne Unit Prices Begin to Outperform Houses
After years of lagging behind houses, Melbourne’s unit market is finally showing signs of sustained recovery.
In the December quarter of 2025, median unit prices rose 2 per cent, edging ahead of house price growth of 1.8 per cent over the same period. The shift suggests affordability pressures are beginning to reshape buyer preferences across the city.
Inner and Middle-Ring Suburbs Lead the Charge
Data from the Real Estate Institute of Victoria (REIV) shows the strongest unit price growth occurred in Melbourne’s inner and middle-ring suburbs, with areas such as Murrumbeena and Abbotsford emerging as standout performers.
REIV chief executive Toby Balazs said affordability remains the key driver behind the surge.
“With affordability still being something that is certainly on the radar of Victorian property buyers, being able to get on the property ladder is probably more likely to come from medium-density,” Mr Balazs told realestate.com.
He added that the trend reflects a broader change in buyer attitudes.
“It does point to a structural shift in the acceptance of apartment living.”
Why Rising Unit Prices Matter for Housing Supply
Professional buyer’s advocate Nicole Jacobs from Cohen Handler says not all apartments perform equally over the long term.
She recommends targeting larger, older-style units, even if they are located slightly further from the CBD.
This type of stock typically offers:
- Scarcity value
- Larger internal floor plans
- Stronger owner-occupier appeal
10 Best Melbourne Suburbs for Unit Price Growth (December Quarter)
| Suburb | Median Unit Price | Quarterly Growth |
|---|---|---|
| Murrumbeena | $632,500 | 50.4% |
| Abbotsford | $657,000 | 34.1% |
| Bonbeach | $983,500 | 29.4% |
| Moonee Ponds | $650,000 | 27.5% |
| Bentleigh | $971,250 | 26.8% |
| Mordialloc | $820,000 | 26.2% |
| Box Hill | $571,000 | 24.4% |
| Camberwell | $1,050,000 | 23.5% |
| Kew | $849,500 | 22.8% |
| Hampton | $1,310,000 | 22.3% |
What This Means for Melbourne’s Property Market
Melbourne’s unit resurgence highlights how affordability constraints are reshaping buyer behaviour. As houses become increasingly out of reach, medium-density living is no longer a compromise but a preferred entry point for many buyers.
If current trends continue, apartments could play a central role in both housing affordability and future supply growth across Melbourne.
