Key takeaways
- Rental yield is annual rent as a percentage of property value — the measure of cash flow, not of capital growth.
- Melbourne's highest yields sit in inner-city units, around 5–5.6%, against roughly 3% for houses in prestige suburbs.
- The trade-off is structural: yield comes from buildings, growth comes from land. You cannot maximise both in one property.
- Written for 2023 — yields have held up better than values since, with vacancy at 1.1% in October 2025.
- For a foreign buyer, high-yield inner-city units are also the most accessible category, being new strata stock.
Are you looking for a profitable investment opportunity in Melbourne? With the market in full recovery mode, now is the perfect time to make a profitable investment.
Investing in property can be a great way to build wealth, but where should you invest?
In this article, we'll reveal the suburbs with the highest rental yields for 2023, so you can make an informed decision and maximize your returns.
Why invest in rental yields?
Rental yield is the annual income generated from rent as a percentage of the property's value. A higher rental yield indicates better cash flow, which can be useful when making property investment decisions. The level of rental return you can expect is determined by factors such as the location of the property, the type of property, the condition of the property, as well as supply and demand in the market.
Investing in rental yields can provide a steady stream of income and long-term capital growth. It can also help you diversify your investment portfolio and hedge against inflation.
Why invest in Melbourne?
Melbourne is one of the most livable cities in the world, with a vibrant culture, excellent education and healthcare systems, and a strong economy. It is also a popular destination for international students and migrants, which drives demand for rental properties.
Despite the recent slump in the property market, Melbourne's housing values have recovered and are now higher than they were a year ago. This creates a window of opportunity for investors to get into the property market as it picks up again.
Top Performers for Rental Yields Here are some of Melbourne's top performers for rental yields, based on the latest data as of November 7, 2023:
Suburb Region Rental yield (%) Median rental value ($)
| Melton | Melbourne – West | 4.5 | 340 |
| Hastings | Mornington Peninsula | 4.2 | 455 |
| Harkness | Melbourne – West | 4.2 | 377 |
| Melton South | Melbourne – West | 4.1 | 360 |
| Kurunjang | Melbourne – West | 4.1 | 358 |
| Campbellfield | Melbourne – North West | 4.1 | 383 |
| Frankston North | Mornington Peninsula | 4.1 | 346 |
| Maddingley | Melbourne – West | 4.1 | 402 |
| Dallas | Melbourne – North West | 4.0 | 378 |
| Meadow Heights | Melbourne – North West | 4.0 | 384 |
The above table is taken from the Corelogic report and provides an overview of the best rental yields in Melbourne.
1. Melton
Melton is a suburb located in Melbourne's west, and it has the highest rental yield in the city at 4.5%. The median rental value is $340 per week. Melton is a growing suburb with a lot of potential for capital growth, and it's a great option for investors looking for affordable properties with high rental yields.
2. Hastings
Hastings is located on the Mornington Peninsula and has a rental yield of 4.2%. The median rental value is $455 per week. Hastings is a popular location for families and retirees, and it's known for its beautiful beaches and relaxed lifestyle.
3. Harkness
Harkness is another suburb located in Melbourne's west, and it has a rental yield of 4.2%. The median rental value is $377 per week. Harkness is a relatively new suburb that's still developing, and it's a great option for investors looking for affordable properties with high rental yields.
4. Melton South
Melton South is located in Melbourne's west and has a rental yield of 4.1%. The median rental value is $360 per week. Melton South is a growing suburb with a lot of potential for capital growth, and it's a great option for investors looking for affordable properties with high rental yields.
5. Kurunjang
Kurunjang is located in Melbourne's west and has a rental yield of 4.1%. The median rental value is $358 per week. Kurunjang is a growing suburb with a lot of potential for capital growth, and it's a great option for investors looking for affordable properties with high rental yields.
6. Officer
Officer is located 48km south-east of the Melbourne CBD and has a rental yield of 3.6%. The median rental value is $520 per week, up 10.6% over the previous 12 months. Officer is a popular location for families, and it's known for its great schools and community facilities.
7. Mickleham
Mickleham is located in Melbourne's north and has a rental yield of around 3.7%. The median rental value is $450 per week, up 7.1% over the previous 12 months. Mickleham is a growing suburb with a lot of potential for capital growth, and it's a great option for investors looking for affordable properties with high rental yields.
Factors Affecting Rental Yield
Rental yield is influenced by several factors, including:
Location of the property
Type of property
Condition of the property
Supply and demand in the market
Understanding these factors will help global investors better understand the potential returns on investment in each suburb.
Don't Miss Out on This Opportunity
Investing in property can be a great way to build wealth, but it's important to choose the right location to maximize your returns. Melbourne has many suburbs with high rental yields, and we've highlighted some of the top performers in this article. However, it's important to remember that rental yield is just one factor to consider when making an investment decision. Other factors, such as capital growth potential, vacancy rates, and planned investment, should also be taken into account.
If you're interested in investing in property in Melbourne, contact us today to learn more about our services and how we can help you find the right investment property. Don't miss out on this opportunity to build wealth and secure your financial future. Act now and contact us to get started!
Josh Tay