The house vs unit decision is one of the most debated questions in Melbourne property investment. Houses offer land value and renovation upside. Units offer lower entry prices, higher gross yields and lower maintenance. In 2026 the answer depends heavily on which suburb you are buying in.
Melbourne-Wide Comparison
| Metric | Houses | Units |
|---|---|---|
| Median Price | $920,000 | $580,000 |
| Gross Rental Yield | 2.4% | 3.9% |
| 5-Year Capital Growth | +22% | +14% |
| Vacancy Rate | 1.6% | 2.1% |
| Body Corporate Fees | None | $2,000-$8,000 pa |
| Land Content | High | Low to None |
Suburb-by-Suburb Breakdown
| Suburb | House Yield | Unit Yield | Better Buy |
|---|---|---|---|
| Northcote | 1.4% | 3.5% | Unit for yield |
| Preston | 2.7% | 4.0% | Unit for yield, house for growth |
| Reservoir | 3.2% | 4.8% | Unit for cash flow |
| Brunswick | 2.3% | 4.1% | Unit for yield |
| Ivanhoe | 1.6% | 3.2% | House for growth |
| Box Hill | 2.8% | 4.3% | Unit for yield |
GeeVee Verdict
Buy a house if your primary objective is long-term capital growth and you have the budget. Buy a unit if you want cash flow, a lower entry price or access to suburbs where house prices are prohibitive. In Melbourne’s inner-north, units are delivering 3.5-4.8% gross yields vs houses at 1.4-2.7% — the yield gap is significant.
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