Melbourne’s median asking rent rose to $575 a week, the realestate.com.au Rental Affordability Report showed.
Victoria was the only state where rental affordability improved in the past year, despite rents continuing to rise and low-income earners being all but locked out without assistance.
REA Group today released the realestate.com.au Rental Affordability Report which shows Victoria is the most affordable state for renters by a wide margin.
The modest improvement reflected that Melbourne’s median advertised rent growth over 2025 was not as strong as other states, compared to household incomes.
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Between December 2024 and December 2025, median advertised rents in Melbourne rose from $560 to $575 a week, growth of just over 2.5 per cent, behind the nearly 5 per cent growth nationally.
The report provides a measure of the share of rental properties that Australian households can afford to rent.
A median-income Victorian household could afford to rent 63 per cent of all rentals advertised from July to December 2025, compared to a national figure of 37 per cent, which is a new low.
REA Group senior economist Angus Moore said affordability had declined 35 per cent in Melbourne since 2020.
It’s fallen nationally by more than 50 per cent, and by more than 60 per cent in the cities of Brisbane and Adelaide.
Melbourne’s median advertised rent is $25 cheaper than Adelaide and nearly $100 cheaper than Brisbane’s weekly rent.
REA Group senior economist Angus Moore said rental affordability in Victoria had declined 35 per cent in the past six years.
But it’s far worse for low-income households, also hardest hit by the cost-of-living crisis, who could afford just 3 per cent of all private rentals in Melbourne.
“We’ve seen very strong growth in rents at the more affordable end in recent years,” Mr Moore said.
The modelling doesn’t factor in any assistance that low-income earners might receive and is based only on private rentals advertised on realestate.com.au, which doesn’t include social or affordable housing schemes.
“It does underscore the fact that trying to rent in the private market as a low-income household without government support would be almost impossible,” he said.
Mr Moore said slow net migration into Victoria following the Covid pandemic had helped reduce pressure in the private rental market.
“New rental vacancy rates are still on the lower side, but they’re up from where they were in 2022 and 2023 and that’s been matched by a slowing in rent growth, which is why affordability did improve a little bit in the past 12 months.”
He added: “It’s still challenging, but it has improved because rents just haven’t been growing as quickly as in some other parts of the country.”
Rising investor interest in buying properties in Melbourne could help improve rental affordability by adding stock to the rental market.
“It started to pick up through 2025. If you look at the areas that have increased in popularity with investors, a lot of them are in Melbourne,” Mr Moore said.
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