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High rental returns in regional Victoria

Data from the Real Estate Institute of Victoria reveals that regional areas offer higher rental returns than metropolitan Melbourne.

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Two- and three-bedroom homes in regional Victoria are performing well for investors, providing rental return rates of 5.3 and 4.9 per cent respectively, Real Estate Institute of Victoria (REIV) data shows.

In metropolitan Melbourne however, two- and three-bedroom homes only have rental return rates of 2.7 and 3 per cent respectively.

Morwell is a hotspot for two-bedroom homes, with rental returns of 8.3 per cent over the last year to March, followed by Sale at 7 per cent, and Moe at 6.9 per cent.

Moe is a hotspot for three-bedroom homes, with rental returns of 6.9 per cent, followed by Morwell at 6.7 per cent and Bairnsdale at 6.6 per cent.

While slightly lower than two- and three-bedroom homes, rental returns for four-bedroom homes are mostly higher than metropolitan Melbourne, with Wodonga being the best area for returns, yielding rental returns of 5.3 per cent, followed by Sale at 5.1 per cent. Lara, which is close to Geelong’s CBD, was the only non-regional area to make the top three rental returns out of all categories at 5 per cent.

REIV president Joseph Walton said regional Victoria has a lot to offer investors.

“While capital growth in regional Victoria has been more moderate, country Victoria offers investors some of the state’s highest rental returns,” Mr Walton said.

“Regional Victoria provides real value for money with affordable entry points to the market and high rental returns, allowing investors to service their loan.

“Property is a long-term investment, with improved infrastructure and amenities across the state likely to drive house price growth in the coming years.”

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