MR Advocacy director and buyer’s agent Madeleine Roberts says she has reversed advice said was giving clients on one-bedroom apartments just 12 months ago.
Older one-bedroom apartments priced around $400,000 are back in buyers’ sights across some of Melbourne’s most expensive suburbs.
A new Market Picks Spring 2026 report from buyer’s agency MR Advocacy has noted the$412,000-$475,000 price being paid for one bedders in South Yarra, Elwood and Brighton is just a fraction of the $2.6m being paid for houses.
But with rents high enough that the apartments will effectively pay for themselves in as little as 20 years, compared to the almost 30 years for a house, it’s becoming a price point property investors are eyeing off in the aftermath of major changes to investor tax settings.
Director and buyer’s agent Madeleine Roberts said the shift had overturned advice she was giving clients just 12 months ago.
“I myself was one of those people who warned people away from them only 12 months ago,” Ms Roberts said.
The report, using HtAG Analytics (property investor data firm) data to July 31, puts South Yarra’s one-bedroom median at $411,958, compared with $1.97m for houses.
In Elwood, the one-bedroom median is $435,070 against $2.1m for houses, while Brighton’s $475,090 figure compares with a $2.6m house median.
That difference has become more significant following Albanese government changes to limit negative gearing to new builds in the May budget this year, with investors widely expected to seek out higher rental returns as a way to make up for the annual tax benefit that had made stretching themselves more
Greater Melbourne units cost almost 30 per cent less than houses at the median despite carrying a slightly higher median asking rent
REA Group September Market Trends data shows Greater Melbourne’s median unit sale price was $617,500 across August, a figure $262,500 below the $880,000 typical house’s cost.
It means that even though Melbourne units cost almost 30 per cent less than houses at the median, their typical asking rent is slightly higher at $590 a week compared with $580.
That leaves units returning investor owners about 4.99 per cent of what they paid for the initial purchase each year, compared with 3.7 per cent for houses.
But buyers have had good reason to be wary.
The apartment at 3/38 Kensington Rd, South Yarra, sold for $500,000. MR Advocacy’s report puts South Yarra’s one-bedroom median at $411,958, compared with $1.97m for houses.
Melbourne’s median unit sale price is still 0.4 per cent below where it was five years ago, while the house median has risen 7.9 per cent over the same period.
Ms Roberts said the comeback did not make every one-bedder a good buy.
The report favours pre-1980s brick apartments in smaller blocks, ideally above 40sq m, with parking, natural light and manageable owners corporation costs.
The apartment at 4/11 Bluff Ave, Elwood, sold for $440,000. MR Advocacy’s report puts Elwood’s one-bedroom median at $435,070, against $2.1m for houses.
It warns buyers to be cautious of large modern developments with expensive shared facilities, cladding concerns, litigation or unresolved special levies.
“You can pick them up for $450,000, like it’s just insane value,” Ms Roberts said.
MR Advocacy recently bought a one-bedroom apartment in Elwood’s Golden Mile for a client for $415,000.
It was already leased for $450 a week, giving the buyer a 5.6 per cent return.
Belle Property South Yarra principal and director Mark Konishi says first-home buyers, parents helping adult children and interstate investors are among those targeting one-bedroom apartments.
Belle Property South Yarra principal and director Mark Konishi said first-home buyers leaving the rental market, parents helping adult children and interstate investors were among those targeting one-bedroom apartments.
“We’re selling a lot of properties prior to getting to the market,” Mr Konishi said.
He said his office had done about five or six such deals this month before launching a full advertising campaign.
One-bedroom rents in his market could reach $550-$650 a week, depending on the property, he said.
KRIA Mortgages director and mortgage and finance broker Rishi Bhatia says some first-home buyers who can borrow $500,000-$600,000 are instead shopping around $350,000-$400,000.
But KRIA Mortgages director and mortgage and finance broker Rishi Bhatia warned buyers chasing the lowest-priced apartments could face far fewer finance options.
He said most major lenders on his panel required a minimum apartment size of about 40sq m.
The result could be counterintuitive: a $350,000 apartment may be harder to finance than a $600,000 property simply because of the smaller size.
The apartment at 107/317 New St, Brighton, sold for $450,000. MR Advocacy’s report puts the suburb’s one-bedroom median at $475,090, compared with $2.6m for houses.
Mr Bhatia said some first-home buyers capable of borrowing $500,000-$600,000 were deliberately searching closer to $350,000-$400,000 to leave more room in their household budgets.
“They just want a foot in the door to get into the property market,” Mr Bhatia said.
He urged buyers to arrange pre-approval and check their lender would accept the specific apartment before signing a contract, particularly when looking below 40sq m.
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