Victoria’s rental market in 2025 presents both challenges and opportunities for tenants seeking stability and landlords navigating investments. Let’s break down the latest trends so you can make informed decisions in this evolving landscape. Whether you’re leasing or investing, understanding the current market dynamics is key to achieving your goals. Victoria’s Rental Market Update

Rising Rents and Market Stability: A Balancing Act

If you’ve been following the property market, you’ll know that rent hikes have been a hot topic. While metropolitan Melbourne saw median weekly rents rise by $20, reaching $570 per week, regional Victoria remained stable at $450 per week. This marks a shift from the rapid price increases of recent years, suggesting that the market may be finding its footing.

Interestingly, the Metropolitan Rent Index (MRI) held steady for the first time since June 2021, while the Regional Rent Index (RRI) rose by 1.6%. What does this mean for you? If you’re a tenant, now might be a great time to secure a long-term lease before demand shifts again. If you’re a property owner, this stability presents a window to review investment strategies with confidence.

Rental Availability: The Declining Supply Dilemma

One of the biggest concerns right now is the drop in new rental bond lodgments—down 4.5% across Victoria. Some areas, like Outer Eastern Melbourne (-12.0%) and Gippsland (-13.3%), are feeling this squeeze even more. Additionally, active rental bonds have fallen 3.6% year-on-year, hinting at a reduced rental stock.

For landlords, this presents a unique opportunity: with fewer rental properties available, well-maintained homes are in high demand. For tenants, though, it means competition is getting tougher. If you’re struggling to find a rental or need strategic investment advice, reach out to our team at Best Property Agent—we’ll guide you through every step of the process!

Changing Tenant Behavior: Longer Lease Terms and Lower Turnover

With rental stock tightening, tenants are holding onto leases longer. The average tenancy duration has risen to approximately 24 months, meaning less movement in the market. The exception? One-bedroom apartments, which still have the highest turnover at 15.5%.

So, if you’re a landlord with a one-bedroom property, now’s the time to optimize your rental strategy. And if you’re a renter searching for long-term security, we can help find the right home for your needs.

Investment Trends: More Borrowing, But Where’s the Affordability?

Despite rising rents, investors are still diving in. Victorian households borrowed $7.341 billion for property investment, marking a 6.6% quarterly increase. Yet, only 10.4% of new lettings met low-income affordability criteria, a slight drop from previous quarters.

This imbalance raises important questions. Is your rental property positioned competitively? Are you maximizing returns while staying within market trends? At Best Property Agent, we specialize in helping investors optimize their portfolios—whether it’s through smart property management, rental pricing strategies, or new investment opportunities.

Looking Ahead: How to Navigate Victoria’s Rental Market in 2025

Victoria’s rental market is at a turning point. With stabilizing metro rents, rising regional demand, and a shrinking pool of available rentals, both tenants and landlords need to stay ahead of the curve.

Here’s our expert advice:

• For renters: If you find a suitable rental, consider locking in a longer lease to ensure stability.
• For landlords: Now is the time to fine-tune your investment strategy. With less competition in the rental space, ensuring your property stands out is crucial.
• For investors: With borrowing up and rental stock down, there’s real opportunity in the market—but strategic planning is key.