Investor Yields Returns and What the Numbers Show

Melbourne's property investors are seeing yields of around 2.5% to 3.5% in the current market, with some areas performing better than others.

This matters now because the Melbourne property market is experiencing a slowdown, with auction volumes and clearance rates down compared to previous years. The current median house price in Victoria is around $920,000, while units are selling for approximately $620,000. Investors are looking for areas that offer higher yields to offset the slower growth in property values.

In areas like Bayside and the Inner East, where property prices are higher, investors are looking at yields of around 2.5% to 3%. However, in areas like Frankston, where prices are lower, yields can be as high as 4%. The Frankston corridor, which includes suburbs like Seaford and Carrum, is experiencing growth due to its proximity to the city and infrastructure developments like the Frankston Railway Station upgrade. Organisations like the Real Estate Institute of Victoria (REIV) and the Urban Development Institute of Australia (UDIA) are also keeping a close eye on the market, providing valuable insights and data to investors.

Local Market Trends

According to data from the REIV, the median house price in Melbourne's inner suburbs is around $1.2 million, while in the outer suburbs it's around $700,000. Units in the CBD are selling for around $500,000, while in areas like South Yarra and Prahran, they're selling for over $600,000. On specific streets like St Kilda Road and Commercial Road, prices are even higher, with some properties selling for over $1 million. The REIV also reports that rental yields in Melbourne are around 3.2% for houses and 4.1% for units, based on data from June 2026.

For investors looking to get into the Melbourne market, it's essential to do their research and look at areas that offer higher yields. Suburbs like Highton, which offer a mix of lifestyle and affordability, are becoming increasingly popular. The local council, the City of Greater Geelong, is also investing in infrastructure developments like the Highton Village shopping centre upgrade, which is expected to boost property values in the area. With the right research and advice, investors can still achieve strong returns in the Melbourne property market, despite the current slowdown.