Melbourne’s highest gross rental yields by distance from the city

Investors are always seeking locations and property types that can deliver the highest returns on their investment. In this analysis RP Data highlights some interesting outcomes in Melbourne.

Those suburbs within a 10kms radius of the Melbourne CBD with the highest yield for houses were Brunswick East and St Kilda East. Both suburbs returned a gross rental yield of 4 per cent. This compares favourably to the citywide yield for houses of 3.4 per cent in February.

Highest yielding areas in Melbourne, RP Data

In the middle ring of suburbs, from 10 to 20kms from the CBD the highest yields were recorded in Dallas of 5.6 per cent. In the outer suburbs Melton South recorded a yield of 5.6 per cent. It is interesting to note that similar yields are available in the middle and outer suburbs and they are much higher than is found in the inner city.

Highest yield Melbourne middle suburbs

Investors looking for yield are really faced with a choice between the inner city and the rest of Melbourne.

There is much greater disparity in the unit market. The highest yield within 10kms of the CBD was in the suburb of Melbourne at 5.8 per cent. In the middle suburbs Macleod was well ahead of all others at 7.3 per cent. In the outer suburbs Melton recorded the highest yield of 6.3 per cent.

Highest yielding Melbourne  - Outer suburbs

The rule of thumb for investors in the detached houses segment does not hold in the unit market where higher yields can be found in a wider diversity of locations.

Robert Larocca
RP Data Victoria Housing Market Specialist

About Robert Larocca

Robert Larocca has built a profile over the past eight years as an expert on the Victorian residential property market. He worked for the REIV both directly and as a consultant over 8 years acting as a spokesperson, managing its research department and public policy. He has been a media and government relations consultant and spent a decade working across the three levels of government including as a Councillor and Mayor in the City of Moreland. He has well developed leadership skills in the not for profit sector and has been the Chairperson of CERES Community Environment Park for 9 years.

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