Best Suburbs to Invest in Melbourne this 2026

In 2026, Melbourne continues to be one of the strongest short-term rental investment markets across Australia. The city attracts all types of travellers year round: weekenders, business travellers, visitors, and people travelling for sport, concerts, and a range of international events. That mix supports steady demand across the year, with sharp spikes during the holiday season and when the city hosts events.

Thinking about buying an investment property in Melbourne? The suburb you choose can change your short-term rental income. Read on below to learn more about which areas in the city are doing best.

Melbourne Airbnb market in 2026: what to expect

Melbourne suburbs potential property boom is shaped by two forces:

1. Baseline demand keeps bookings flowing most weeks.
2. Events move the market fast when the calendar fills up.

According to the latest trends in Melbourne's rental market, you can expect pricing to rise most during:

• the Australian Open in January, the Formula 1 Australian Grand Prix in March and other major sporting events,
• international concerts and touring acts,
• school holidays and long weekends, and
• conference weeks around the CBD and South Wharf precinct.

Peak season Airbnb pricing strategies in New South Wales

Events-based pricing surges are key to maximising your returns for your property in Melbourne. If you set one flat nightly rate, you often leave money on the table. A strong pricing approach usually includes:

• checking major event dates early,
• adjusting minimum stays for peak nights,
• using lead-time rules to lift rates close to arrival, and
• protecting weekends while still capturing midweek demand.

For an example of how event periods can shift occupancy and pricing, see our blog on Melbourne occupancy during Oasis concerts.

What Melbourne's top investment suburbs have in common 

The top suburbs to invest in Melbourne for Airbnb-style returns usually share a few features:

• ‍Great transport: Trams and trains make arrivals easier and reduce the need for a car.
• Proximity to key attractions: Guests book where they can do more with less planning. Think of key local demand drivers like stadiums, beaches, shopping strips, and cultural precincts.
• Walkable lifestyle: Properties near restaurants, cafés, and parks often lift both occupancy and nightly rate.
• Lifestyle amenities: CBD guests often prefer the convenience of apartments, particularly short-term rentals (STRs) where they have access to kitchen amenities for a home away from home. Larger homes with swimming pools and barbeques, situated in family-friendly suburbs make for the ultimate family getaway. Parking and a simple check-in flow can also lift reviews.

For short-term rentals, professional Airbnb styling and photography can be a smart investment for optimising listings, getting more clicks, and improving conversion. You can even earn up to 20% more with professional photos compared to amateur photos.

Best Melbourne suburbs for Airbnb in 2026

Below are suburbs with earning potential based on estimates from Hometime’s team of revenue specialists:

1. Melbourne CBD

‍Average nightly rate: $220

‍Occupancy: 70%

The CBD, the heart of Melbourne, is a consistent performer because it attracts both leisure and corporate demand. Guests stay for meetings, conferences, shopping, and museums.

Local attractions include Federation Square, Queen Victoria Market, and easy access to tram lines. A well-presented apartment can do well midweek, which supports steadier cash flow.

2. Southbank

‍Average nightly rate: $270

‍Occupancy: 65%

Southbank often commands a higher nightly rate, especially for modern apartments with views. Demand comes from South Wharf, Crown, and the convention precinct.

It also suits travellers who want quick access to the Arts Centre and the National Gallery of Victoria (NGV). If your place offers balcony space or parking, it can stand out in search results.

3. South Yarra

‍Average nightly rate: $190

‍Occupancy: 70%

The affluent, inner-city suburb of South Yarra, a mere 4kms southeast of Melbourne CBD, appeals to guests who want diverse dining experiences, shopping at designer boutiques in the local villages, and easy city access.

Chapel Street and the nearby Botanic Gardens help drive demand. This suburb can suit investors looking for strong occupancy without relying only on event weeks.
Homes and apartments with quality styling tend to win bookings here.

4. Fitzroy

‍Average nightly rate: $253

‍Occupancy: 70%

One of the most expensive suburbs in Melbourne, Fitzroy draws guests who want to experience a “local” Melbourne stay. They come for quirky cafés, street art, live music, bars, independent shops, and street art.

From the eclectic cafes and vintage fashion boutiques of Brunswick Street, to the 24-hectare Edinburgh Gardens for families to frequent, there’s plenty to discover in Fitzroy. 

5. Collingwood

‍Average nightly rate: $235

‍Occupancy: 71%

Collingwood pairs a strong lifestyle scene with fast access to the CBD. Smith Street dining, breweries, and live music create steady weekend demand. It also works well for small groups. If your property can sleep four to six guests comfortably, you may capture higher-value bookings.

6. Richmond

‍Average nightly rate: $230

‍Occupancy: 65%

Richmond sits close to the MCG, Rod Laver Arena, and AAMI Park. That proximity can drive sharp demand spikes during sports events and concerts. Outside peak events, Richmond still attracts business travellers and shoppers keen to explore Bridge Road’s major label factory outlets. Look for properties with easy transport links and a simple guest flow.

7. St Kilda

‍Average nightly rate: $190

‍Occupancy: 70%

Melbourne’s favourite beachside destination, St Kilda is a popular visitor suburb with beach appeal. It performs strongly during warmer months, school holiday periods and during St Kilda’s festivals. Guests come for the foreshore, Luna Park, and the dining strip. Homes that suit families and small groups can do well, especially if you offer parking facilities.

Maximise earnings with Hometime’s professional Airbnb management

Suburb choice matters, but operations often decide outcomes. The same street can deliver very different returns depending on:

• pricing that responds to demand shifts, especially event weeks,
• property styling and professional Airbnb photography that optimise listings and improve conversion,
• hotel-quality Airbnb cleaning and maintenance that protect five-star reviews

Consider partnering with Hometime for professional Airbnb property management in Melbourne and watch your property earn with a stress-free experience.

When hosts switch to Hometime, we often see:

• A 15% average increase in Hometime properties’ occupancy rates compared with the regular short-term rental market in the past two financial years (based on FY24 performance data).
• A 36% improvement in booking conversion thanks to better pricing and guest experience.

Schedule an obligation-free chat below to learn more: