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The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.


Category Archives For: Capital Growth

Inner Melbourne Rental Yields for Houses 2012-2017

Infographic showing highest and lowest rental yields in inner Melbourne, Australia in 2017

Last week, Secret Agent released our report on the current state of rental yields for houses across inner Melbourne. Here is a summary of our findings:

  • Over the last 5 years, yields have dropped by 0.42%, from 3.06% in 2012 to 2.64% in 2017.
  • During this period, median house prices have increased by 38% (9% p.a.), compared to only an 11.8% increase in weekly rents (2.88% p.a.).
  • On average, median weekly rents are between $500 and $700 for most suburbs. Sale prices tend to fluctuate significantly according to suburb.
  • Suburbs with lower median prices tend to have higher yields, as weekly rent is mostly consistent across all regions.
  • High and low yields are not concentrated in any particular region of inner Melbourne.
  • Collingwood, Cremorne and West Melbourne had the highest median yields in 2016/17 at 3.69%, 3.32% and 3.26%, respectively.  Median prices were well below the $1million mark.
  • Burnley, East Melbourne and Alphington had the lowest median yields at 1.35%, 2.07% and 2.31%, respectively. Median prices were all above $1.3million.
  • Sale price is strongly, negatively correlated with yield (-47%). Yield is more dependent on purchase price rather than rental income.
  • Yields are even lower for larger properties, as sale price increases faster than median rent.
  • In 2017, 2, 3 and 4 bedroom homes can expect to yield 2.72%, 2.61% and 2.52%, respectively. All three types have had the lowest yields since 2012.
  • Investors paying high prices for properties are even more reliant on capital growth to increase their returns.

The Secret Agent Report – Capital Growth Update

We have just released our latest Secret Agent report!

This month, Secret Agent analyses the updated capital growth index for the first quarter of 2017. The index tracks all resales of properties in inner Melbourne suburbs since January 2000.

By using only resales of the same, unchanged properties over time, the index tracks the true capital growth of properties in Melbourne, taking out factors such as subdivisions, extensions and any other alterations, all of which affect measures of average prices.

Access the Capital Growth Update report now!


The Secret Agent Report – End of Year Review

We have just released our latest Secret Agent report!

In this issue, we provide a deep overview of the year in terms of the yield curve, apartment price per square metre rates and capital growth, concluding with a wrap up of each area’s performance in 2016.

From all of us at Secret Agent, we wish you a very happy holiday season!

Access the 2016 End of Year Review report now!

secret agent report end of year review 2016


Melbourne, Docklands and Southbank: Capital Growth of Apartments

Secret Agent’s apartment capital growth index tracks price changes of the same apartments over time. Rather than simply using average price changes, basing the index on resales gives a better measure of true capital growth. The index tracks how apartment prices change when buying off the plan, as well as all subsequent sales of the property. This bulletin takes a closer look at apartments in Melbourne CBD, Docklands and Southbank. Note that when talking about annualised growth rate, we are referring to converting the growth rate over one quarter to an annual figure.

Since 2009, CBD and Southbank apartments have been growing in value at about the same rate, with the CBD slightly ahead for all but the first quarter of 2016 (Figure 1). Since the end of 2011, CBD apartments have grown in value by an annual average of 2.83%. while Southbank apartments by 2.60%. Over the whole time period, Docklands growth was well below the other two suburbs, averaging 1.40% over the past five years.

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