A “tipping point” for Melbourne's rental market: Where are the cheapest rents in Melbourne's eastern suburbs?

We took a look at the highs and lows across the rental market in Melbourne’s eastern suburbs.

Matthew Sims
July 10, 2025

Bayswater, Lilydale and Croydon renters are among those worst hit by rental increases over the past five years, according to Domain’s June quarter rental report.

The data reveals rental price rises in most major capitals have either stagnated or seen their slowest growth in years, with the June quarter being the first time since 2019 that house rents across the combined capitals have remained stable for four consecutive quarters.

However, on a suburb-by-suburb basis, there are plenty of ups and downs in growth.

🏡 How have home rental prices fluctuated?

According to the June quarter report, the highest quarterly increases in houses for rent across Melbourne’s eastern suburbs were found in Lilydale (12.5 percent to $585 a week), Forest Hill (12.3 percent to $640 a week) and Bayswater (9.1 percent to $600 a week).

In terms of increases over the past five years, Bayswater and Lilydale also topped the list – with both showcasing a jump in the median rental price for houses of 46.3 percent. Ringwood East followed closely behind at 42.3 percent to hit $623 a week in the June quarter.

Those looking for the cheapest median house rent would have to look further east, with Ferntree Gully among the most frugal at $605 a week, Nunawading at $610 a week and Mitcham and Croydon both sitting at $630 a week.

Those with the lowest quarterly increases included Box Hill, staying steady at $645, Doncaster, with no change to remain at $750, and Nunawading rising by 2.5 percent to $610.

House prices in Melbourne's eastern suburbs on a roller coaster, but young people don't get to ride

Median house prices across Melbourne’s eastern suburbs have recovered after unstable market conditions during Covid.

🏘️ What about units?

The price gap between renting a unit and renting a house in Melbourne narrowed to just 0.9 percent, its lowest point since 2012.

Looking closer at the eastern suburbs, the largest quarterly increases included:

Bayswater’s jump of 10.9 percent to hit $510 per week
Ringwood, which increased by 10.6 percent to $520 a week
Clayton, rising by 10 percent to $550 per week.

Some of the area’s lowest median unit rent increases included Surrey Hills, which rose by 3.6 percent to $570 per week and Mount Waverley, which jumped by 3.5 percent to $590 per week.

Here's what the median wage gets you as a renter in Melbourne's eastern suburbs

New statistics from the Australian Institute of Health and Welfare have highlighted 23.5 per cent more employed Victorians sought homelessness assistance over the past financial year, with experts pointing to increasing rental costs among the issues facing low-income earners.

🗝️ How has Melbourne’s rental market been lately?

Melbourne house rents held at $580 per week, unchanged for a fourth straight quarter – the longest stretch of stability since 2011-12.

Unit rents also remained unchanged over the June quarter, holding at the previous quarter’s record of $575.

Domain chief of research and economics Dr Nicola Powell said the minimal growth in major cities showed the market was shifting, signalling a “much needed pause” for renters.

“Cost of living pressures have reached a tipping point,” she said.

“Renters are maxed out and landlords are being forced to hold steady.

“We’re also seeing a shift in demand – renters are downsizing or choosing units to stretch their budgets, which is why unit rents are now rising faster than houses.”

Image Credit: Jakub Żerdzicki/Unsplash