Top 5 Melbourne Suburbs for Airbnb Investment in 2025
- Gerardo Deltiglio
- Apr 25
- 5 min read
Updated: May 14
Your Data-Backed Guide to the Most Profitable Short-Term Rental Locations in Melbourne
Melbourne’s short-term rental market continues to thrive, fuelled by domestic and international tourists looking for flexible, local-style accommodation. With booking platforms like Airbnb dominating the travel stay landscape, more hosts and investors are eyeing opportunities across inner-city Melbourne.
But not all suburbs deliver equal returns.
At Staypilot, we analysed up-to-date performance data from trusted tools like Airbtics to uncover which Melbourne suburbs outperform others in terms of Airbnb revenue, occupancy rate, and nightly pricing. Whether you're a first-time host or a seasoned investor scaling your portfolio, these insights will help you make smarter, more profitable property decisions.
1. South Melbourne – High-Yield Airbnb Suburb with Strong Returns
Annual Revenue: A$60,320
Occupancy Rate: 68%
Average Nightly Rate: A$237
Active Listings: 323
Estimated Gross Yield: ~10.1%
South Melbourne leads the pack as one of Melbourne's most profitable Airbnb suburbs, with the highest average revenue among key short-term rental locations. Despite a slightly lower occupancy rate, its strong per-night pricing and year-round demand result in impressive returns.
Just moments from the CBD and Southbank, and a short drive to Port Melbourne’s beaches, the area is especially popular with corporate guests and lifestyle travellers seeking a stylish, well-connected stay in a quieter, more residential setting.
Why Staypilot recommends South Melbourne:
Strong nightly rates deliver higher returns per booking
Located between Southbank, Albert Park, and Port Melbourne- ideal for both business and leisure stays
Consistently attracts quality guests seeking a boutique, well-connected city-fringe experience
At Staypilot, we make it easy for hosts in South Melbourne to unlock high earnings with low effort. With multi-platform listings, local property managers, and data-driven pricing tools, we ensure your property is consistently optimised and guest-ready- every stay, every season.
Investor Insight: If you're looking to position a high-end or design-focused short-term rental in a low-saturation market, South Melbourne offers standout ROI.
2. Richmond – High Airbnb Occupancy and Reliable Returns
Annual Revenue: A$56,556
Occupancy Rate: 74%
Average Nightly Rate: A$204
Active Listings: 359
Estimated Gross Yield: ~10.3%
With its vibrant café culture, walkable streets, and proximity to the Melbourne CBD, Richmond stands out as a top-performing Airbnb suburb in Melbourne for investors. Its strong occupancy rate and solid nightly pricing make it especially appealing to corporate travellers, digital nomads, and extended-stay guests who value both comfort and convenience.
From sporting events at the MCG to brunch along Bridge Road, Richmond attracts a steady stream of visitors year-round- a key reason behind its consistent Airbnb returns.
Why Staypilot Recommends Richmond:
Walkability to the MCG, Bridge Road, and Yarra trails
Strong café culture and local authenticity
Excellent transport connectivity
3. Melbourne CBD – High Demand Meets High Competition
Annual Revenue: A$54,460
Occupancy Rate: 77%
Average Nightly Rate: A$189
Active Listings: 7,259
Estimated Gross Yield: ~9.6% (based on unit price)
As Melbourne’s central hub for business, education, and tourism, the CBD continues to deliver strong returns for Airbnb hosts. With one of the highest occupancy rates among all suburbs, properties in the CBD benefit from steady guest traffic, short booking windows, and high turnover, particularly from corporate travellers, students, and international tourists.
Well-suited for studios and one-bedroom units, the area thrives on shorter stays and consistent demand, making it ideal for hosts with a solid operations setup and dynamic pricing strategy.
Why Staypilot Recommends the Melbourne CBD:
High occupancy is balanced by intense competition
Shorter stays and quick turnover can boost reviews and rankings
Central location offers unbeatable convenience for travellers
With Staypilot’s data-driven management, multi-platform exposure, and on-the-ground support (no call centres here), your Melbourne CBD property can run like clockwork- all while earning more with less effort.
4. South Yarra – The Lifestyle Market with Strong Returns
Annual Revenue: A$50,836
Occupancy Rate: 77%
Average Nightly Rate: A$177
Active Listings: 515
Estimated Gross Yield: ~9.3%
South Yarra blends luxury, liveability, and location- making it one of Melbourne’s most desirable short-term rental markets. From designer boutiques on Chapel Street to leafy parks and vibrant nightlife, the suburb attracts style-conscious travellers, couples, and working professionals seeking comfort and connection.
Its strong occupancy rate and steady revenue reflect a high-performing Airbnb market, especially for smaller, well-styled apartments.
Why Staypilot Recommends South Yarra:
High concentration of 1-2 bedroom apartments perfect for couples or solo travellers
Excellent connectivity via South Yarra Station
Highly desirable location for long weekends and extended stays
With Staypilot’s multi-platform listing strategy and local management expertise, your South Yarra property can thrive year-round- with minimal effort and maximum return.
5. St Kilda – Iconic Beachside Appeal
Annual Revenue: A$48,700
Occupancy Rate: 75%
Average Nightly Rate: A$174
Active Listings: 705
Estimated Gross Yield: ~9.4%
St Kilda remains one of Melbourne’s most recognisable short-term rental markets- and for good reason. With its coastal charm, vibrant tourism scene, and iconic attractions like Luna Park and St Kilda Beach, the suburb consistently attracts both domestic and international travellers.
Whether it’s weekenders, families, or long-stay guests looking for a relaxed base, St Kilda’s appeal lies in its laid-back lifestyle and year-round events calendar, making it a reliable performer in the Airbnb space.
Why Staypilot Recommends St Kilda
High guest appeal for leisure, family, and group bookings
Properties with beachy, casual aesthetics perform especially well
Popular for longer stays thanks to practical amenities like WiFi, full kitchens, and laundry
With Staypilot’s data-driven pricing, multi-platform exposure, and local support, properties in St Kilda can capitalise on consistent tourist demand- while owners enjoy high earnings with low effort.
Final Thoughts: Which Suburb Is Right for You?
While each suburb in this report offers its strengths, the best-performing location for your property depends on several factors- including property type, guest profile, amenities, and how it's priced and positioned.
At Staypilot, we don’t believe in one-size-fits-all advice. Instead, we offer tailored appraisals backed by live market data so that you can make the most informed decisions for your specific property and goals.
Whether you're just getting started or looking to optimise an existing short-term rental, our team can help you unlock high earnings with low effort- through multi-platform listings, local property managers, and a smart, data-driven strategy.
Want to know how your property would perform? Get in touch for a free, personalised assessment.
About Staypilot
Staypilot provides comprehensive short-term rental management services to homeowners in Melbourne, Geelong, the Bellarine Peninsula and the Mornington Peninsula. Our platform blends extensive experience with a personal approach, delighting owners and guests alike. By listing your home with Staypilot, you can enjoy the exceptional returns of the short-stay market without the hassle.
