High-Return Studio Apartments: Insights from Real Estate Agency Melbourne

Studio apartments are not all the same. Some may appear to be excellent deals on paper, but they disappoint in terms of rental yield, while others quietly exceed expectations and deliver strong returns year after year. If you’re navigating the property market, particularly in the Central Business District (CBD) or fringe suburbs, learning how to locate high-return studios with a real estate agency Melbourne can give your investment strategy a competitive advantage.

As a property investor or even a first-home buyer considering long-term value, it pays to look beyond aesthetics and into the underlying metrics. Here’s how to do exactly that.

Focus on Location, Not Just the Postcode

It’s a well-known adage in real estate for a reason—location matters. But in a dynamic city like Melbourne, it’s not just about the suburbs. You need to zoom in further.

Studio apartments within a 5-minute walk to major transport hubs like Flinders Street Station or Melbourne Central consistently outperform others. Access to tram lines, universities, and business precincts is also critical.

Check the Building’s Rental Appeal

Buyers frequently miss the finer details of the building. Modern facilities such as secure entry, on-site management, gyms, and communal study or lounge areas can drastically increase tenant demand, especially among international students and young professionals.

Steer clear of buildings with high strata fees and limited long-term maintenance plans. Strata costs can erode yield very quickly.

Tip: Ask to review the building’s strata report before committing to a purchase.

Size Matters – But So Does Layout

While many studio apartments in Melbourne average 24-35 square metres, the layout can make or break your return. Clever designs that maximise light, storage, and functional zones will appeal to a broader range of tenants.

Open-plan layouts with a clear division between living and sleeping spaces—without feeling cramped—tend to rent faster and for more.

Watch Out For: ‘Shoebox-style’ apartments under 40 square metres may face lending restrictions from banks and stricter resale conditions.

Assess Occupancy Rates and Vacancy Trends

High-return apartments stay tenanted. Areas with consistently low vacancy rates should be on your radar. For example, inner-city postcodes like 3000, 3004, and 3053 typically show strong occupancy, even during off-peak seasons.

Data Snapshot: SQM Research reports a vacancy rate of just 2.6% for Melbourne City as of May 2025, highlighting strong tenant demand.

Evaluate Rental Yield vs Capital Growth

Don’t fall into the trap of chasing rental yield alone. A balanced approach, considering both ongoing income and long-term capital appreciation, will provide a more resilient return.

62.9% of apartment markets in capital city council areas have seen equal or higher median price growth than houses in May 2025, while rental demand has spiked as students and young professionals return post-pandemic.

Pro Tip: Use tools like CoreLogic or RP Data to compare historical and projected growth in specific micro-markets.

Understand Legal and Zoning Constraints

Some studio apartments in Melbourne come with caveats, such as being classified as serviced apartments, student accommodation, or having short-stay restrictions. These factors can limit who you can rent to and affect financing.

Ensure the apartment is not bound by restrictive covenants or special zoning overlays that could impact its marketability.

Due Diligence: Engage a local real estate expert to interpret the Section 32 and check compliance with local council regulations.

Prioritise Professional Property Management

Studios with the potential for high returns deserve equally high-quality management. A professional property manager from a real estate agency Melbourne who knows rental trends can help maintain tenant quality, reduce vacancy periods, and ensure rental income is maximised.

Melcorp Real Estate, for instance, specialises in managing inner-city studio apartments with tailored leasing strategies that appeal to Melbourne’s evolving tenant demographic.

Final Thoughts

Spotting high-return studio apartments isn’t just about price per square metre—it’s a mix of due diligence, market understanding, and foresight. The right apartment in the right pocket of Melbourne, coupled with strong tenant demand and solid management, can deliver consistent, above-average yields with long-term growth potential.

Whether you’re adding to an existing portfolio or looking to make your first investment, studio apartments are worth a closer look—if you know where and how to look.

Ready to explore high-return studio apartment opportunities with a real estate agency Melbourne? Contact Melcorp Real Estate today for tailored advice, expert property management, and exclusive access to high-performing CBD assets.