The latest figures from RP Data show that Melbourne investment properties as a whole are heavily negatively geared, with the city-wide median rental yield for houses a whimsical 3.8%. 

This figure is the lowest among all Australian capital cities, despite Melbourne rents being higher than the national average. 

Median rental yields in the unit market are not much better, with Melbourne also the lowest yielding unit market among capital cities. 

At a more local level, roughly a third of Melbourne suburbs with detached housing have a yield of 3% or lower on houses, with 8% of unit markets fitting the same description. 

The city’s lowest yielding market is currently East Melbourne, where the median yield for houses is just 1.9%. 

More affordable Melbourne areas with poor yields include the Banyule and White Horse areas.