Australia’s Apartment Market 2025: Why Undersupply Creates Opportunity for Investors

Australia’s apartment market is at a critical turning point. The latest State of the Apartment Market Report (H1-2025) by Charter Keck Cramer confirms what many investors have already felt: supply remains well below long-term demand, even as population growth and improving economic conditions fuel ongoing pressure on rents and prices.

For investors, this creates one of the most compelling environments of the decade — a market where well-chosen opportunities can deliver both strong yields and capital growth.

A Market Defined by Shortage and Change

Apartment completions reached their cyclical low in FY2024 and remain significantly below the levels required to meet the Federal Government’s National Housing Accord targets. Even with more launches in FY2025, the pipeline is only a fraction of what is needed.

At the same time, overseas migration continues to run above pre-pandemic levels, sustaining high demand for rental accommodation. Structural shifts — from Baby Boomers downsizing to Millennials entering the housing market — are adding to this demand. With interest rate cuts already underway, buyer sentiment is lifting, and developers are preparing new projects for delivery.

This is exactly the type of environment where strategic guidance and access to quality stock are essential — and where iBuyNew helps investors secure a first-mover advantage.

Key Takeaways 

• Undersupply will persist, keeping pressure on both rents and values.

• Melbourne offers the strongest upside, with significant re-rating potential.

• Sydney provides scale and resilience, with demand outpacing new supply.

• Brisbane and the Gold Coast remain attractive, provided investors are selective about timing and developer strength.

• Perth, Adelaide and Canberra add balance, offering yield, emerging growth, and stability.

• BTR success validates apartment demand, with high occupancy and strong capital inflow

Melbourne: The Most Undervalued Market

Melbourne recorded its lowest ever build-to-sell apartment completions in FY2025, with only 3,070 apartments delivered. In contrast, the build-to-rent (BTR) sector contributed 3,440 apartments, highlighting its importance in meeting the city’s housing needs

While supply remains constrained, demand is strengthening, driven by affordability relative to Sydney and Brisbane, returning interstate buyers, and overseas investor interest. For investors, Melbourne represents one of the most attractive opportunities nationwide. Interstate and offshore capital already see Melbourne as undervalued — and as the city re-rates, early movers stand to benefit from significant growth.

Sydney: A Market of Scale and Resilience

Sydney remains Australia’s most mature apartment market. FY2025 saw the first increase in project launches and commencements since 2022, though levels remain well below long-term averages. To meet the National Housing Accord, Sydney needs to deliver 35,000 apartments annually, yet current projections sit at just 21% of this target

This gap between supply and demand creates upward pressure on both rents and values — a dynamic that has historically underpinned Sydney’s long-term growth. Government initiatives, including the NSW Pre-Sales Finance Guarantee and new planning pathways, are paving the way for stronger supply over time. For investors, Sydney offers scale, resilience, and enduring global appeal.

Brisbane and the Gold Coast: Strong Demand, Selective Timing

Brisbane’s economy remains buoyant, supported by migration and strong buyer demand. While construction costs are higher than Melbourne and Tier 1 builders are at capacity, the city’s growth trajectory remains underpinned by the 2032 Olympics. For investors, the key is timing and project selection. By working with reputable developers — something iBuyNew prioritises — investors can capture growth while managing delivery risks.

The Gold Coast continues to shine, buoyed by Baby Boomers’ shift into apartments and lifestyle-driven demand. Completions are forecast to average 2,320 per year through FY2026-29 — almost double the historic average. With a strong owner-occupier buyer base, settlement risk is considered low, making the Gold Coast an attractive long-term market for both lifestyle and investment-driven acquisitions.

Perth, Adelaide and Canberra: Regional Growth Stories

Perth is one of the tightest rental markets in the country, with yields of 5.8% and a vacancy rate of just 0.7%. While labour shortages present challenges, these same conditions are driving rental growth and yield performance, offering investors robust income streams.

Adelaide is emerging as an attractive, investor-friendly city, with the State Government signalling strong support for development. While demand growth is moderating from recent highs, this moderation creates opportunities for investors to secure quality apartments before the next growth cycle builds.

Canberra remains one of the most balanced markets, with vacancy rates close to equilibrium and steady supply. For investors seeking stability and consistent yields, Canberra offers an appealing counterweight to more volatile markets.

At iBuyNew, we translate these market dynamics into clear investment strategies. We help investors identify the right city, the right project, and the right timing — ensuring each acquisition is positioned for growth and resilience.

📈 The next property cycle is already underway. Don’t wait for undersupply to tighten further — Book a Strategy Session with an iBuyNew investment specialist today and secure your advantage.