While over the long term rentals have grown in line with property values, more recently rental growth has remained moderate.
The average rental income from an investment property in metropolitan Melbourne was $365, according to the Department of Human Services in Victoria, rising 2.4% from the previous year.
For investors, this means an average rise in rental income of $8-10 per year.
The Eastern metropolitan area fetched the highest median rent at $490, while Port Phillip and Stonnington in the Southern metro generated the highest rental return by suburb, achieving $1,050 and $1,150 respectively, according to a report from the Department of Human Services.