The property market in Melbourne operates as a dynamic system which delivers substantial investment prospects to smart investors. The short-term rental market in the city will experience significant expansion during the next four years because of increasing population numbers, international visitor arrivals, and numerous major international events.
Property owners need to decide between different investment options. Choosing the right location is the critical first step in separating an average return from a truly maximised one. The following guide identifies Melbourne suburbs which show the most potential for Airbnb profitability during 2026.
The Unbeatable Inner-City Core: CBD, Southbank & South Yarra
The heart of Melbourne stands as the top choice for Airbnb investment. The Melbourne CBD and Southbank are magnets for business travellers attending conferences at the Melbourne Convention and Exhibition Centre and tourists wanting landmarks like Federation Square and the National Gallery of Victoria at their doorstep. The modern apartments in this area maintain high nightly prices while maintaining full occupancy.
The area of South Yarra continues to serve as a luxury and style hub for its residents. Its appeal is driven by the high-end boutiques and chic dining on Chapel Street and the serene beauty of the Royal Botanic Gardens. The real estate in this location draws sophisticated visitors who choose to spend more money for luxury accommodations.
The Lifestyle and Culture Hubs: Fitzroy, St Kilda & The Mornington Peninsula
The identification of particular traveller groups requires research into suburban areas which present unique characteristics. The Melbourne creative hub centres around Fitzroy and Collingwood which draw young artistic people through their active street art, independent galleries, and famous café scene. These suburbs offer an authentic ‘live like a local’ experience that is in high demand.
For a classic Melbourne experience, St Kilda offers an unbeatable beachside lifestyle. The area attracts visitors throughout summer months and during major events including the St Kilda Festival, which welcomes people of all ages from families to international backpackers.
The Mornington Peninsula has established itself as Melbourne’s leading coastal retreat which extends past the city boundaries. The real estate market in Rye and Sorrento remains active because these towns attract people who want to stay permanently in beachfront properties and luxury homes throughout the year.
Strategic Growth Corridors: Richmond & The North
The event-driven return strategy benefits from Richmond’s strategic location as a centre. An apartment building generates consistent rental income, especially when near to the Melbourne Cricket Ground (MCG) and Rod Laver Arena which creates high demand during AFL games, Australian Open events, and major concerts.
The suburbs of Preston and Reservoir in northern areas are becoming smart investment options because of gentrification. The area provides affordable entry points through its enhanced transportation system and developing selection of quality cafes and amenities, which draw professionals and families who want space at a lower cost than the inner city.
Unlock Your Property’s Potential with BNB Butler
Selecting a prime location serves as the initial requirement for the process. There are three essential elements to consider when it comes to achieving success in competitive short-stay markets, consisting of market-demand-based pricing systems, optimised listing strategies, and exceptional guest service that generates positive reviews.
This is where BNB Butler excels. As Melbourne’s leading Airbnb management specialists, we turn promising properties into high performing, passive income assets. We take care of all aspects of property management including guest communication, professional housekeeping, and maintenance services which allows you to enjoy the benefits without dealing with the pressure.
Contact us today to find out more about what we do.
