New data from the Real Estate Institute of Victoria (REIV) reveals that over the last year to 30 September, every single property type in regional Victoria had higher yields than those in metropolitan Melbourne.
The clear winners for investors are two-bedroom properties, offering investors in regional areas gross rental yields of 4.9 per cent for houses and 5.1 per cent for units on average.
Gil King, CEO of the REIV, said that the regional suburb of Morwell was the highest performer for yields.
“With a median house price of $120,000 and a weekly median rent of $193, two-bedroom houses in Morwell recorded one of the state’s highest returns at 8.3 per cent,” he said.
“This was followed by Wangaratta in Victoria’s north-east, where the same property type achieved a gross rental yield of 7.6 per cent.
Meanwhile, the best Melbourne suburb was with a gross rental yield of only 2.2 per cent, despite its weekly median rent of $650 and a median house price of $1,535,000.
State-wide, Mr King said three-bedroom houses also performed well with rental yields of 4.7 per cent.
Top rental returns performers for three-bedroom houses across the state included Red Cliffs at 7.6 per cent, Myrtleford at 7.5 per cent, Mooroopna at 7.2 per cent, Stawell at 6.7 per cent and Horsham at 6.5 per cent.at 7.8 per cent,
“While a high yield does not guarantee a property in a particular area will continue to perform well, it provides a useful guide for investors when deciding where and what type of property to buy,” Mr King recommended.