Partner, Leasing & New Business
Melbourne’s high-end rental market has demonstrated resilience and renewed momentum throughout 2025, underpinned by a sharp rebound in investor activity and persistently limited supply.
Credit growth for housing investors accelerated to 6.6 per cent in the year to August—up from 3.9 per cent a year earlier, according to the Reserve Bank of Australia. This renewed activity is expected to gradually support a market still contending with historically low vacancy rates.
Cotality’s latest Rental Review reported a 4.3 per cent rise in national rents in the 12 months to September 2025—a positive sign for continued improvement ahead for Melbourne providers, who have witnessed the country’s most modest growth of
1.4 per cent.
“Well-appointed properties are leasing quickly and at values reflective of their quality, ensuring low time-onmarket and robust returns.”
—Evelyne Surja
Luxury stock, while experiencing some yield compression, continues to attract strong interest from renters seeking space, amenity, and lifestyle.
“Well-appointed properties are leasing quickly and at values reflective of their quality, ensuring low time-on-market and robust returns for rental providers,” Evelyne Surja, Partner, Leasing & New Business at Kay & Burton says. “Supply constraints in the upper-tier segment have also driven a rise in off-market leasing opportunities.”
Local renters seeking flexibility without compromise—often downsizers, renovating homeowners, or vendors between homes—continue to dominate the luxury rental segment. Highly sought-after homes with three to four bedrooms, pools, studies, and prestigious addresses remain tightly contested, often leased within days of listing.
Ms Surja observes that this trend underpins the ongoing stability of Melbourne’s top-end market, in contrast to broader suburban areas where seasonal fluctuations are more pronounced.
“Toorak, in particular, has displayed remarkable consistency in leasing activity throughout the year, reflecting both its prestige and lifestyle status,” she says. That equilibrium is reflected in landmark results such as the lease of the penthouse at 65 Lansell Road, Toorak, which achieved $8000 per week over a 24-month term (rising to $8400 in the second year)—a record long-term rental price for the suburb. The result highlights both the calibre of renters and the confidence underpinning Melbourne’s premium leasing market.
Looking ahead to 2026, Ms Surja anticipates an increase in prestige leasing activity as homeowners and investors alike seek to maximise value and flexibility. “While policy changes, interest rate movements, and regulatory considerations remain important factors to monitor, Melbourne’s luxury rental segment is expected to maintain its stability,” Ms Surja says. “There will be great opportunities for investors driven by strong lifestyle demand and a discerning renter base.”