Which properties fetch the highest rents in Melbourne
Budding investors could earn thousands of dollars a week if they targeted larger family homes in the inner suburbs of Melbourne.
Houses with four bedrooms or more within 5km from the CBD fetched the biggest rental returns this year, outpacing any other configuration as demand for extra space skyrocketed during lockdown.
The property type returned a median of $1000 in the inner ring, compared to $795 in the city’s middle suburbs and just $450 in the outer ring, a PRD Real Estate report has revealed.
Houses in the middle ring were the most resilient, recording the highest median rent growth in the past year, at 5.3 per cent, making them an solid investment.
PRD chief economist Diaswati Mardiasmo said the inner-city’s unit markets had unsurprisingly weakened under the pressures of lockdown.
One-bedroom units, which were largely occupied by international students and travellers before the pandemic, dropped 9.6 per cent annually to fetch a median rent of $330.
“It’s a bit of a warning for investors,” Dr Mardiasmo said.
“But that doesn’t mean you just don’t (buy) units at all. Three-bedroom units are actually fetching quite high rents in the inner ring too.”
The typical property type was earning landlords a median of $680 a week.
“Everyone thinks that the inner ring is only one to two-bedroom studios but there are some three-bedroom apartments in the inner suburbs and they are hard to replace,” Dr Mardiasmo added.
She said their rarity amid the city’s new high-density, high-rise developments ensured they “held their value”.
The Melbourne Market Update showed inner ring vacancy rates were also on a declining trend since the peak in October last year.
Buyer’s advocate Emily Wallace said the typical “three-bedroom, two-bathroom, single-storey home often does quite well as an investment”.
“And although it’s always been popular with families, now it’s also attracting the smaller families who are needing the extra bedroom for a study or home office.”
Realestate.com.au data shows 68.2 per cent of filtered searches for properties nationally were
seeking a minimum of three bedrooms.
But Ms Wallace said low interest rates had also encouraged tenants to consider if it was cheaper to buy than to rent.
“Some of the larger rentals can fetch about $3000 a week, and it starts to blur the lines on if people should just buy,” she added.
The PRD report featured suburbs within 5km of the city as the inner ring, while areas between 5km-10km were in the middle ring and anything 10km-20km were included in the outer ring.
2021 MEDIAN RENTAL PRICES
• Inner: $600 per week
• Middle: $495 per week
• Outer: $370 per week
• Inner: $775 per week
• Middle: $575 per week
• Outer: $400 per week
• Inner: $1,000 per week
• Middle: $795 per week
• Outer: $450 per week
• Inner: $330 per week
• Middle: $320 per week
• Outer: $320 per week
• Inner: $440 per week
• Middle: $400 per week
• Outer: $385 per week
• Inner: $680 per week
• Middle: $565 per week
• Outer: $500 per week
Data: PRD Real Estate Melbourne Market Update
Originally published as: Which properties fetch the highest rents in Melbourne