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Some surprisingly high rental yields, including up to 6.7 per cent, can be found in and around the Melbourne CBD, according to the latest data modelling from the peak real estate industry body in Victoria.
According to the latest data modelling from the Real Estate Institute of Victoria (REIV), Melbourne’s one-bedroom apartment market has the highest rental yield in the state.
“The REIV’s analysis shows that Melbourne’s one-bedroom unit market is the most profitable for investors with a rental yield of 6.7 per cent,” REIV president Robyn Waters said.
“Considering that you only need to outlay $347,500 to buy a one-bedroom apartment in the city, it is a great market for people to dip their toe into property investment and be confident of a tidy return of around $450 a week.
“The surpris[ing] result from this report was the prevalence of regional Victorian towns in the high rental yield list, with three-bedroom houses in Moe generating a 6.6 per cent return and three-bedroom houses in Stawell returning 6.4 per cent.”
Other regional towns that boast yields above 6 per cent include Shepparton and Wodonga, with three-bedroom houses yielding 6.2 per cent 6 per cent, respectively.
A one-bedroom unit in Southbank generates a 6.2 per cent return, with a three-bedroom unit in Melbourne fetching the same return.
“Positive results for inner-city areas such as Melbourne, Southbank, South Yarra and Docklands are largely due to their appeal to CBD workers, higher education students and their families as well as retirees, all of whom value proximity to the CBD with all it has to offer and access to public transport,” Ms Waters said.
“The strong performance of regional towns is likely to be a product of low rental vacancy rates: demand for rental properties is at an all-time high and there is simply not enough stock on the market to meet demand in many areas. For example, the rental vacancy rate for the Latrobe Valley – South and West Gippsland is sitting at 1.3 per cent, which could go some way to explaining high rental yields for many towns in the area in our analysis.
“Given recent interest rate cuts, APRA guidance to loosen lending standards and the result of the federal election which has delivered stability, the REIV is starting to see an upturn in investor activity which is likely to continue as we approach the spring selling season.”
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