The supply picture
New retail supply in Melbourne is broadly flat (+5% year-on-year) — roughly in balance, so the demand side does the talking.
Precinct by precinct
Across 307 Melbourne retail precincts, the current tilt is 95 tightening · 61 demand-led · 75 quiet · 76 oversupply risk (median supply change -4% year-on-year). This is a stock-picker's market: the pressure is uneven, not uniform.
Tightening / demand-led: Melbourne CBD - North, Melbourne CBD - East, Clayton (North) - Notting Hill, Carlton
Watch (oversupply risk): Fitzroy, Essendon - East, Mentone, Surrey Hills (West) - Canterbury
The sector backdrop
Valuations lag rates — capital softening still to come; income cushions it. Retail cap rates sit around 5.59% on our national read. Conditions are neutral / transitional on our macro read.
Cap rate = the yearly income as a share of price (a higher number is cheaper). The number above is a market read; where our model puts fair value, and the five-year return forecast, are in the report.
The full Melbourne retail read
Fair-value cap rate, the five-year total-return forecast and the downside range — plus the precinct data in full — sit in the Melbourne Retail report, refreshed every edition.
See the report →Source: ABS building approvals (supply), MPLC precinct model to SA2 (demand tilt), RBA (rates, yields) and the MPLC valuation model. As at September 2026. Information & forecasts only — not advice.