Investor Yields Returns and What the Numbers Show

Melbourne's property investors are seeing yields of around 3-4% in some suburbs, with the median house price sitting at approximately $920,000.

This matters now because the current market conditions, with a plunge in auction volumes to the worst start to winter on record, are making investors rethink their strategies. The demand for housing, driven by migration and the desire for home ownership among Gen Z, is still present, but investors need to be savvy about where they put their money.

In areas like Bayside and the Inner East, where property prices are premium, investors are looking at yields of around 2-3%. However, in growth corridors like Frankston, where the median house price is lower, at around $740,000, yields can be higher, at around 4-5%. Specific streets, like Nepean Highway in Frankston, and neighbourhoods, such as Highton, with its family-friendly homes and amenities like basketball courts, are attracting investors. Organisations like the Real Estate Institute of Victoria (REIV) are also providing guidance and support to investors navigating the market.

Local Market Trends

According to data from the REIV, the median rent for a house in Melbourne is around $450 per week, with units renting for approximately $380 per week. In the 12 months to June 2026, Melbourne's property prices have seen a slight decline, with the median house price dropping by around 2%. However, some areas, like Watsonia, have seen significant growth, with a recent auction sale of $916,000.

For investors, the numbers show that it's essential to do their research and understand the local market trends. With the right property in the right location, investors can still achieve strong yields, even in a slower market. As the market continues to evolve, investors should keep a close eye on areas with high demand and limited supply, like the Frankston corridor, and be prepared to act quickly when opportunities arise.