Melbourne vs Western Australia Airbnb: Which Market Earns More

WA's median listing earns A$7.5K more per year than Melbourne's, with higher occupancy, a stronger rate, and faster growth. Here's what that gap means for a real buying decision.

VS

The headline gap is A$7.5K a year. Western Australia's median Airbnb listing earns A$18.1K annually against Melbourne's A$10.6K, and that difference isn't driven by one flattering metric — WA leads on occupancy, nightly rate and year-on-year momentum simultaneously. That combination is rare enough to take seriously.

What this piece will settle is whether that income advantage survives the practical questions: regulation, seasonal cash-flow shape, and the kind of operator each market actually rewards. The data is clear enough to make a call. The honest caveat is that Inside Airbnb figures reflect medians across wildly different properties and postcodes, so street-level variance — particularly in a state as geographically sprawling as WA — can swallow averages whole.

Where the money actually is

The A$59 gap in nightly rate between WA (A$216) and Melbourne (A$157) is the place to start, because at 42% occupancy that rate premium compounds into roughly A$9,000 in additional gross revenue per year before expenses. Melbourne's 30% occupancy partially offsets its lower rate, but not enough — the maths only gets worse for Melbourne when you run the full year.

What catches the eye more than the absolute figures is the direction of travel. WA's occupancy has risen 19.0 percentage points year-on-year; Melbourne's by 8.6. Both markets are recovering or growing, but WA is doing it at more than twice the pace. A 19-point occupancy swing in a single year isn't noise; it suggests genuine demand coming back faster than supply is arriving to meet it.

Melbourne's 15,424 active listings against WA's 10,674 tells you something about competitive density. More listings chasing similar demand is one structural reason Melbourne's occupancy lags, and it's a pressure that doesn't ease quickly. New supply in a capital city with a large rental-conversion pool tends to keep a ceiling on occupancy gains. WA's smaller listing base relative to its demand growth is a more comfortable dynamic to buy into.

The cashflow shape across the year

Melbourne's seasonality is inverted relative to most sun-and-beach markets: it peaks in July at 67% and troughs in October at 47%. That 20-point swing is meaningful but the floor is relatively high. A Melbourne operator running at 47% in the slowest month is still covering fixed costs reasonably well, and the winter peak aligns with arts, sport and events tourism rather than weather — which tends to be stickier and less sensitive to a bad forecast.

WA's shape is more dramatic. The June peak hits 54% but September drops to 34%, a 20-point fall that mirrors Melbourne's range but from a lower floor. A 34% trough month on a mortgage in a regional WA property requires cash reserves that some buyers underestimate at purchase. For a year-round operator who needs consistent income, Melbourne's flatter profile is genuinely easier to manage even if the annual total is lower. For a seasonal operator — particularly one who can block their own use of a coastal or regional WA property during the September trough — WA's structure works fine and the annual income advantage holds.

Where the rules sit right now

Neither market currently operates a night cap, which puts both Melbourne and Western Australia in a more permissive position than, say, Sydney or parts of the UK. For a buyer doing diligence today, there's no mandatory registration ceiling to model around in either jurisdiction. That's a genuine positive for both.

The risk calculus differs by market type. Melbourne is a dense capital city where short-term rental regulation has been politically contested and where strata by-laws in apartment buildings can impose their own restrictions entirely independently of state rules — a problem that catches buyers who check council policy but miss the owners' corporation rules on the title. WA's exposure is different: its listings are more geographically dispersed across coastal towns and regional centres where local shires can set their own conditions. Neither market filters out a serious buyer right now, but a Melbourne apartment purchase needs a strata by-law check as a hard pre-condition, and a regional WA purchase needs a shire-level planning confirmation before exchange.

The call

Western Australia wins on the income numbers without much ambiguity. Higher occupancy, a stronger nightly rate, faster growth and a less saturated listing pool add up to a market that's doing more of the work for operators right now. The A$7.5K annual revenue gap is large enough that Melbourne would need a substantial purchase price discount or meaningfully lower running costs to close it on a yield basis — and the data doesn't suggest either is reliably available.

The case for Melbourne despite losing on income is a real one, just narrower. If you're buying primarily for capital growth and want the liquidity of a major capital city — easier resale, deeper buyer pool, more financing options — Melbourne carries structural advantages that WA's regional and coastal markets can't match. And if you need the predictability of a flatter seasonal curve because you can't absorb a thin September, Melbourne's 47% trough is more forgiving than WA's 34%. But as a pure short-term rental income play, WA is the pick.

Frequently asked questions

Methodology. Figures are medians across active listings from Inside Airbnb's 2025-08-05 snapshot, refreshed automatically as new snapshots land. The table and chart above always show the latest data; the commentary is re-written when the numbers move materially.