FAMILY homes in Horsham and Stawell have some of the strongest rental returns in the state.
Real Estate Institute of Victoria data for the final three months of 2017 shows almost every rental property type in regional Victoria outperformed equivalent types in Melbourne.
Stawell and Horsham had high returns for three-bedroom houses, with yields of 7.1 per cent and 6.7 per cent respectively.
The highest returns in the state for three-bedroom houses in the same period were 7.4 per cent.
Institute chief executive Gil King said the yield was an important factor for investors to consider, because it reflected a property’s annual rent as a percentage of the purchase price.
“Rental properties in the Wimmera are delivering strong returns of around six per cent for investors, as yields benefit from affordable house prices and solid median rents,” he said.
“While investment properties in regional areas are unlikely to experience the same capital growth as those in Melbourne, they typically record higher rental returns than their city counterparts.
“This is due to their low purchase prices below $250,000 and relatively high weekly rents.”
Institute data shows Horsham’s median weekly rent for a three-bedroom house is $250, while Stawell’s is $220.
Across all property types, Horsham has a rental yield of 6.4 per cent, compared with the regional Victorian average of 4.1 per cent.
Stawell’s rental yield is 6.5 per cent.
Mr King said returns for three-bedroom homes in Horsham and Stawell had been stable for the past five years, around the six-per-cent mark.
He said the median house price in Horsham at the moment was $213,500, while Stawell’s was $175,000.
“The Wimmera continues to offer an affordable entry point to the property market, with median house prices below $250,000,” he said.
“Infrastructure commitments by both the state and federal governments are expected to drive price growth across the state in the coming years.”