Elsternwick vs Lorne

The median house price is $2.1M in Elsternwick and $2.0M in Lorne, so Lorne is the cheaper entry point, with Elsternwick houses about 6% dearer.

On cash flow, Elsternwick leads: houses there return a gross rental yield of 2.47%, compared with 1.65% in Lorne, a gap of 0.82 percentage points.

Over the past year house prices moved -3.6% in Elsternwick and +4.0% in Lorne, so recent momentum favours Lorne, while Elsternwick went backwards.

Looking back three years, Elsternwick houses are -5.4% and Lorne houses -11.3%, so Elsternwick has compounded faster than Lorne over the longer window.

Rental vacancy is 0.4% in Lorne and 1.1% in Elsternwick, so landlords in Lorne face less competition for tenants. Anything under 2% is generally read as a tight market where tenants compete for homes.

Elsternwick is the bigger suburb, with a population of 10,887 against 1,327, roughly 8 times the size of Lorne; a larger suburb usually means a deeper pool of buyers and tenants.

In short: Elsternwick for rental income, Lorne for a lower purchase price, Lorne for recent price momentum, Lorne for the tighter rental market. Which matters more depends on whether the investor is buying for cash flow, capital growth or affordability.