Melbourne Rent Crunch: Suburbs with the Sharpest Increase

Melbourne renters are facing a tough reality. Across the city, rising demand, limited supply, and shifting tenant preferences have driven up rents—especially in suburbs that were once considered affordable. This article highlights where rent hikes are most extreme and what it means for residents, without siding with any particular party.

The latest PropTrack data shows dramatic annual rent growth in Melbourne’s inner-city suburbs. Units in Melbourne saw a 38% rise in median weekly rent, while Aberfeldie increased 33%, Southbank 32%, and West Melbourne 30%. These surges reflect intense tenant competition and shrinking vacancy rates, which range from approximately 1.2% to 2.5% across metro regions.

Not limited to units, house rents in some suburbs have jumped steeply as well. Ultra-premium Toorak saw around a 42.9% increase, pushing median weekly prices to $1,500. Meanwhile, Werribee South rose by 33.3%, Heidelberg West by 28.8%, and Beaumaris by 26.7%—suggesting affordability pressures are now widespread across both inner and outer suburbs.

Over a broader timeline, longer-term data from CoreLogic/Home Victoria shows significant rises across eastern suburbs: Bayswater renters now pay 59% more than five years ago, Clayton is up 42%, and Glen Waverley/Mulgrave is up about 35%.

Despite these surges, some areas have leveled off. PropTrack notes that over 100 suburbs saw rents flatline over the past three months, indicating that rents may be hitting tenants’ affordability ceiling.

At a city-wide level, median weekly rents in metropolitan Melbourne rose to $580 for houses and approximately $550 for units in the year to March 2025. This growth is more modest but tied to persistently low vacancy rates and continued demand pressure.

What this means: Tenants in high-growth suburbs face rapidly escalating housing costs, while others may soon see a slowdown as the market strains under affordability limits. Suburbs like Toorak, Southbank, Melbourne CBD, and Werribee South are now among the least affordable. Others, such as Bayswater, show the compounding effect of long-term price escalation.

Suggested solution: Greater housing supply, particularly in well-connected areas, remains the only sustainable remedy. Policymakers should support high-density developments in areas with rising demand to rebalance the market—both to relieve pressure on renters now and to prevent future shortages.