Smith Street Soars: Collingwood Tops List for Highest Rental Yields

Collingwood has clinched the title of the city’s highest-yielding suburb for property investors, with gross rental returns beating every other local postcode according to the latest figures released last week.

The surge in investor activity comes as Collingwood’s tenant demand remains red-hot and mortgage rates hold steady after two years of volatility. With local employers holding firm and no sign of a let-up in population growth, landlords are seeing strong returns on new and established rental properties. Local agents point to a steady stream of newcomers, propelled by the area’s café culture, proximity to the city’s tech sector, and accessible transport links.

Smith Street Leading The Charge

Smith Street, with its blend of converted brick warehouses and sleek townhouses, has become the suburb’s investment heartland. The Collingwood Arts Precinct and popular haunts like Lazerpig and Mollie’s Bar & Diner draw both young professionals and students, many seeking flexible lease terms. Local management firm Urban Asset Partners says the number of rental applications in the 3066 postcode has doubled since early 2025. Meanwhile, demand for one-bedroom lofts on Oxford Street and larger heritage terraces on Hoddle Street hasn’t let up, with vacancy rates sinking to new lows this autumn.

According to the June 2026 report from RealData Collingwood, the median gross rental yield for apartments in the suburb hit 5.4% for the April-June quarter, the first time yields have reached that mark since pre-pandemic highs. The typical two-bedroom unit on Wellington Street, for example, rents for $660 a week, while buyers face an entry price of $635,000-figures that outpace inner urban neighbours. RealData confirmed that Collingwood’s rental turnover is up 14% year-on-year amid a citywide shortage of new listings.

Investors Weigh Up Next Moves

With demand set to remain robust into spring, property advisers say investors targeting Collingwood can expect a steady stream of rental income but must move quickly, as newer builds like the Northumberland Street apartments have seen interest from both owner-occupiers and syndicate-backed buyers. Agencies recommend getting strata checks done early and being ready to compete at auction for renovated properties, particularly in school catchments near St Joseph’s Primary and the Collingwood English Language School.

For landlords, maintaining a well-presented property and responding fast to tenant maintenance requests remain key to maximising yield. With another seven boutique developments in the pipeline, investors are urged to keep close watch on Collingwood’s rental trends heading into 2027.

This article is general information only and is not personal financial or investment advice. Consider your own circumstances and seek licensed professional advice before making financial decisions.