Apartment Vacancy and Rent Outlook H2 2025

CBRE’s Australian apartment report presents our forecasts across 53 precincts.  
 
Key points:

• CBRE expect median rents to grow by 24% between 2025-2030, across 53 precincts in Australian capital cities. By 2030, 92% of 2-bed apartments are forecast to have rents exceeding $700/week (33% exceeding $1000/week).
• We expect capital city vacancy will fall further to 1.1% by 2030 from 1.8% in 2025. These tight conditions will endure as vacancy stays at around half of the previous decade average of 2.5%.
• Newly built apartments trade at a premium to older vintages. For example, newly built two bedroom apartments are at 30% price premium to older vintages. 
• High construction costs and better amenities have also put upward pressure on rents for new builds. These higher rents assist in meeting the return hurdles for newly built apartments.  
• Over the next 10 years, demand for housing is expected to benefit from the triple boost of rising population (+4.1m), rising jobs (+2.8m) and rising income (+$39k). We see c$960bn of additional income in the system to support mortgage, rents and other living expenses.
• Monthly rents are 30-40% cheaper than alternate buy options at current prices. After accounting for on-costs such as municipal rates and strata fees, it is cheaper to rent in all precincts across Australia. 
• CBRE forecast the future supply of apartments is likely to hover around 60,000 pa over 2025-30. Australia’s forecast population growth requires apartment supply of ~75,000 pa to avoid further falls in vacancy. 
• Sydney: Apartment delivery to average 11,700 pa over 2025-30, well below 30,000 pa demand for total housing stock. Vacancy rate is set to fall from 2.0% to 1.2%.
• Melbourne: Apartment delivery to average 9,000 pa over 2025-30, nearly 25% below Sydney. Demand for housing stock (apartments and communities) is likely to average 38,000 pa over the next 5 years. This should continue to drive down city-wide vacancy from 2.1% to 1.4%.
• Brisbane: Apartment delivery to average 4,600 pa over 2025-30. Demand for housing stock (apartments and communities) is likely to average 16,000 pa which will drive down city-wide vacancy from 1.1% to 0.7%.