Is Ararat a good investment? The short answer is: Ararat offers genuine affordability and above-average rental yields by Victorian standards, but recent price falls mean buyers must weigh short-term headwinds against long-term regional value. Read on for a full, data-backed breakdown.

What Is the Short Answer: Is Ararat a Good Investment Right Now?

Ararat sits in the Central Highlands of Victoria, roughly 200 kilometres north-west of Melbourne. It is a self-contained regional town with its own hospital, schools, and court precinct, which gives it a more stable employment base than many rural communities of similar size. For investors who prioritise cash-flow over capital growth, Ararat deserves serious consideration. Entry prices remain well below the Victorian median, and weekly rents hold up reasonably well relative to purchase costs.

That said, the most recent sales data tells a more cautious story. According to DataVic/REIV data (via Collings CRM), the median house price in Ararat for the April-June 2025 quarter was $341,000, representing a quarter-on-quarter fall of 9.1% and a year-on-year fall of 9.3%. Unit medians came in at $270,000 (down 10.0% QoQ and 10.0% YoY), while vacant land sat at $154,000 (down 41.0% QoQ and 44.2% YoY). The land correction in particular is sharp, and prospective buyers of development sites should approach with caution until volumes stabilise.

For context, $341,000 for a house is roughly one-quarter of Melbourne’s metropolitan median, which means the yield arithmetic is attractive even at modest rents. At the ABS Census 2021 recorded median rent of $250 per week, a house purchased at the current median would generate a gross yield of approximately 3.8%. As rents in regional Victoria have continued to rise since the 2021 Census, real-world yields for new landlords are likely higher than this baseline figure suggests.

What Do the Numbers Say About Ararat Property?

Numbers tell the clearest story when it comes to deciding whether investing in Ararat makes sense for your portfolio. Here is what the available data shows:

Population and Demographics

• Population: 8,500 (ABS Census 2021)
• Median age: 45.0 years (ABS Census 2021)
• Median household income: $1,216 per week (ABS Census 2021)
• Median rent: $250 per week (ABS Census 2021)

The median age of 45.0 years points to a stable, established community rather than a transient one. ABS Census 2021 records a median household income of $1,216 per week, which is below the national median but broadly consistent with similar-sized regional Victorian centres. Importantly, a lower income base does not necessarily dampen rental demand; in fact, it can strengthen the tenant pool for affordable properties where buying is out of reach for most local households.

Recent Sales Trends

The price declines recorded across the April-June 2025 quarter are notable. While a single quarter does not define a trend, the fact that both houses and units fell in the double digits suggests that buyer demand has softened meaningfully. Investors considering Ararat property today should treat current asking prices as negotiable and build a buffer for further short-term softness into their financial modelling. On the positive side, buying into a market on the way down – provided you hold for the medium to long term – is historically how regional investors access the best entry points.

How Does Ararat Compare to Inner-Melbourne Suburbs?

For comparison, inner suburbs like Northcote and Fairfield command medians several times higher than Ararat, with correspondingly compressed gross yields. If you are weighing up a high-growth, low-yield inner-city play against a higher-yield, lower-growth regional option, our Northcote investment suburb analysis and our Fairfield investment breakdown provide useful benchmarks for that comparison. Ararat occupies a very different part of the risk-return spectrum.

What Are the Key Considerations When Buying in Ararat?

Every investment decision involves trade-offs. Here are the most important factors to weigh when evaluating Ararat as an investment destination.

Reasons Ararat Could Work for Your Portfolio

• Low entry price: A house median of $341,000 means a 20% deposit is under $70,000 – accessible for many first-time investors or those recycling equity from other assets.
• Stable employment base: Ararat’s hospital, corrections facilities, and courts provide a relatively consistent public-sector workforce that underpins rental demand.
• Limited new supply: Small regional centres rarely attract large-scale apartment or townhouse development, which means rental stock does not suddenly increase and pressure rents down.
• Regional Victoria tailwinds: The Victorian Government has long-standing commitments to regional investment and infrastructure, and remote-working trends continue to push some demand away from capital cities.
• Yield potential: At current price points and prevailing rents (which have risen since the 2021 Census baseline), gross yields in Ararat are competitive with many metropolitan suburbs.

Risks and Challenges to Acknowledge

• Recent price softness: The 9.1% to 9.3% house price decline over the past year signals that the market is in a correction phase. Capital growth cannot be assumed in the near term.
• Liquidity: Ararat has a smaller buyer pool than metropolitan Melbourne. If you need to sell quickly, achieving your target price may take longer than in a liquid inner-city market.
• Land values: The 44.2% year-on-year decline in vacant land prices is a significant red flag for development-focused strategies. Stick to established dwellings unless you have done extensive due diligence.
• Population size: At 8,500 people, the town is relatively small. Any major employer departure or demographic shift can have an outsized impact on vacancy rates.
• Property management distance: Investors based in Melbourne need a reliable local property manager or a firm with regional reach to manage day-to-day tenancy issues efficiently.

Who Is Ararat Best Suited For?

Based on the numbers, Ararat is most compelling for cash-flow-focused investors with a long-term hold strategy of at least seven to ten years, a relatively low debt-servicing burden (given the lower price point), and a tolerance for lower short-term liquidity. It is less suitable for investors who need to realise capital gains within a short timeframe or who require a highly liquid asset.

If you are looking at inner-Melbourne alternatives with stronger growth trajectories, consider also reading our analysis of Alphington as an investment suburb, which profiles a very different demand profile and price growth history.

How Does Collings Real Estate Help Investors Evaluate Ararat?

At Collings Real Estate, we work with investors across both metropolitan Melbourne and regional Victoria to build portfolios that match individual financial goals – not just current headlines. Our approach combines first-party data from our CRM platform with on-the-ground property knowledge to give clients a realistic picture of what a specific suburb or property will actually deliver.

Our Property Strategy Process

1. Goal alignment: We start by understanding your investment objective – yield, growth, diversification, or all three – before recommending any suburb or asset class.
2. Data-driven shortlisting: We use verified sales data (including the DataVic/REIV figures quoted above) alongside rental vacancy rates, demographic trends, and infrastructure pipelines to build a shortlist of opportunities suited to your criteria.
3. Off-market access: Through our portal, registered investors gain access to properties before they are listed publicly. You can sign up to the Collings off-market portal here to be notified of opportunities as they arise.
4. Ongoing management: For investors who purchase, our property management team handles everything from tenant selection and rent collection to maintenance coordination – removing the day-to-day burden of being a landlord.

Whether you are a seasoned investor comparing regional towns against established inner-Melbourne suburbs or a first-time buyer trying to work out whether Ararat fits your budget and goals, our property strategists can work through the numbers with you in plain language.

To get started, contact the Collings team directly:

• Phone: 03 9486 2000
• Email: info@collings.com.au
• Office: 230 Waterdale Road, Ivanhoe, VIC 3079

Or talk to a Collings property strategist today to get a personalised assessment of whether Ararat – or any other regional or metropolitan suburb – fits your 2026 investment strategy.

Frequently Asked Questions About Investing in Ararat

What is the median house price in Ararat?

According to DataVic/REIV data (via Collings CRM), the median house price in Ararat for the April-June 2025 quarter was $341,000, down 9.3% year-on-year.

What is the median rent in Ararat?

ABS Census 2021 records the median rent in Ararat at $250 per week. Rents across regional Victoria have generally risen since 2021, so current asking rents for available properties may be higher than this baseline.

Is Ararat good for rental yield?

At a $341,000 median house price and $250 per week median rent, the implied gross yield is approximately 3.8%. Given that regional rents have risen since the 2021 Census, actual yields for new purchases may be higher, making Ararat relatively competitive on a cash-flow basis compared to many metropolitan suburbs.

What are the risks of investing in Ararat property?

The key risks include recent price softness (houses fell 9.3% year-on-year to June 2025), lower market liquidity compared to metropolitan Melbourne, a small overall population of 8,500, and a very sharp decline in vacant land values (down 44.2% year-on-year) that signals caution for development strategies.

How does Ararat compare to inner-Melbourne suburbs for investment?

Ararat offers much lower entry prices and potentially higher gross yields than inner-Melbourne suburbs, but with lower expected capital growth and lower liquidity. Investors seeking growth-focused assets may prefer inner suburbs; those prioritising cash flow and affordability may find Ararat more suitable.