Victorian Property Snapshot 2025: Top & Flop Postcodes Compared (Capital Growth + Rental Yield)

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The Victorian property market is showing contrasting outcomes across different postcodes. While some suburbs have delivered strong five-year capital growth and reasonable rental returns, others have lagged badly — offering high yields but poor growth, or vice-versa.
In this article we analyse ten postcodes in Victoria that have not achieved five-year growth, and ten that have exceeded the average, compare their rental yields, and then determine which suburb (postcode) currently stands out as the best investment — and which appears the worst.

The Data & Methodology

We selected two groups of postcodes:

  • Group A: Postcodes where five-year capital growth has not occurred (flat or negative performance).

  • Group B: Postcodes where five-year capital growth has exceeded the broader Victorian / Melbourne baseline (≈ 19% five-year growth).
    For each postcode we referenced recent rental yields (gross) from publicly-available suburb data.
    We then ranked them by balancing growth and rental yield, and selected a winner and a loser.

Group A – Under-performers (five-year growth flat or negative)

PostcodeSuburb / AreaDwelling TypeApproximate Gross Rental YieldComments3000Melbourne CBDUnits~7.2%High yield, but capital growth has been flat or negative.3002East MelbourneHouses (units also available)~2.5% (houses) / ~6.0% (units)Very low yield for houses; weak growth.3006SouthbankUnits~6.3%Rental yield moderate; growth under-par.3008DocklandsUnits~6.0%Yield reasonable but capital growth weak.3053CarltonUnits~7.8%Strongest yield in this group, but growth has not followed.3066CollingwoodUnits~5.7%Lower yield and poor growth.3121RichmondUnits~5.9%Moderate yield; growth lagging.3123Hawthorn EastUnits~4.4%Lower yield; growth disappointing.3182St KildaUnits~5.3-5.5%Yield moderate; growth under-performing.3205South MelbourneUnits~5.4%Rental yield okay; capital growth lacking.

Summary for Group A:
These suburbs tend to provide rental yields in the mid-5% to high-7% range (for units in inner Melbourne) but have lacked significant five-year capital growth. For investors prioritising income over growth these might still have appeal — but growth-focused strategy should be cautious.

Group B – Out-performers (five-year growth above average)

PostcodeSuburb / AreaDwelling TypeApproximate Gross Rental YieldComments3311CastertonHouses~8.0%Excellent yield + strong growth.3747BeechworthHouses~4.0%Growth strong but yield modest.3737MyrtlefordHouses~4.0%Similar profile to Beechworth.3250ElliminytHouses~4.5-4.9%Moderate yield; good growth.3995Cape PatersonHouses~3.5%Growth good but yield low.3940Capel SoundHouses (units ~4.1%)~3.9%Yield low; growth solid.3919Crib PointHouses (units ~4.4%)~4.1%Balanced but yield still modest.3911BaxterHouses~4.1%Similar to Crib Point.3741BrightHouses~3.1-3.5%Growth strong historically; yield low.3350Ballarat CentralHouses (~4 units ~4.8%)~3.6% (houses) / ~4.8% (units)Growth above average; yields modest.

Summary for Group B:
These postcodes deliver above-average capital growth over five years, but rental yields are generally lower (mid-3% to ~5%) — particularly in regional or lifestyle markets where prices have risen strongly. Investors focused purely on yield may find less appeal here; but for long-term growth they look stronger.

Best and Worst Investments (Based on Growth vs Yield)

Winner: Casterton (postcode 3311).
Reason: This postcode stands out because it offers both a very strong gross rental yield (~8%) and above-average five-year capital growth. For investors seeking the best balance of income + growth, it ticks the rare “high yield + high growth” box in this dataset.

Runner-up candidates: Elliminyt (3250) and Ballarat Central (3350) also offer decent yields and growth, making them solid alternatives.

Loser: East Melbourne (postcode 3002, houses).
Reason: Houses in this postcode have very low yield (~2.5%) and weak five-year growth. Even if units perform better, the house market in that postcode appears least favourable among the group when judged by both metrics.

Key Take-aways for Investors

  • High rental yield ≠ guaranteed growth. Some suburbs offer 7-8% yields (inner units) but have flat or negative capital growth.

  • Strong capital growth often comes at the cost of low income yield (particularly regional lifestyle markets).

  • The “sweet spot” is a suburb where both growth and yield are above average — rare but possible (eg. Casterton).

  • For long-term residential investment in Victoria: consider the dwelling type, liquidity, vacancy risk, tenant demand and the broader suburb fundamentals (jobs, infrastructure, supply).

  • Beware “growth traps” in regional areas: some former boom-towns may have strong recent growth driven by lifestyle demand, but less sustainable occupancy or tenant demand. Realestate.com.au

  • In Melbourne metro, rental yields tend to be lower overall — according to the Real Estate Institute of Victoria (REIV) quarterly update the median weekly rent in metro is ~$580 and rental yield around 3.3% for houses. REIV

Artwork & Layout Instructions

  • Use a blue-and-white colour palette (consistent with your branding).

  • Header image: panoramic Melbourne skyline on a crisp blue sky (for the “Victorian property market” theme).

  • Insert two infographic blocks: one showing Group A vs Group B comparison (capital growth + rental yield) and one highlighting the winner (Casterton) and worst (East Melbourne) with big badges.

  • Sidebar banner: “Free PDF Download – Victoria Property Snapshot 2025” (optional).

  • On mobile: ensure the tables collapse into a stacked format; infographics are responsive.

  • SEO & readability: use headings (H2, H3) as above, keep paragraphs short, and include internal links to your service pages (eg. “fixed-fee contract prep for Victorian agents”) and relevant anchor text (“Victoria investment property strategy”).

Closing

If you’re assessing investment opportunities in Victoria right now it’s essential to look beyond headline median price rises and dig into both growth and rental yield. The data shows clear divergence between suburbs — some deliver strong income but weak growth; others deliver growth but low income. Our review shows Casterton (3311) emerges as the best balanced performer in this dataset, and East Melbourne houses (3002) the weakest from a combined perspective.
If you’d like a deeper dive into any of these postcodes (sub-urb level, tenant demand, vacancy risk), or want customised modelling of your property strategy, feel free to let us know.