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Home › Property Management › Australia’s Highest Rental Yield Suburbs in 2021
Investing in a property with the best rental yield possible ensures you get a good return on your investment. Rental yield is your annual rental income from the property and is shown as a percentage of the property’s value. Naturally, a higher rental yield means the investment property will give you higher cash flow.
While various factors contribute to the rental yield of each property, location is a big one. We’ve compiled rental yield data for major locations around Australia to help you find the perfect investment property.
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A good rental yield in Australia falls anywhere between 7% and 8% for capital city suburbs. In the regional areas, houses bring rental yields of 12% to 13%, while you can expect rental yields of 8.5% to 11% for units.
The best rental yields in 2020 were found in Collinsville, Queensland at 14.6% and South Hedland, Western Australia at 14.1%.
Source: CoreLogic
The above table is taken from the Corelogic report and provides an overview of the best rental yields in Greater Sydney.
The Sydney rental market has been significantly impacted by the closure of international borders and repeated closure of state borders during this COVID pandemic. Historically, a high proportion of immigrants to Australia initially rent before some go on to buy. With the overseas market completely gone, Sydney rent prices have fallen due to lower than average demand.
According to SQM Research data, the gross rental yield in and around Sydney is 2.5% for houses and 3.4% for units. The average median sale price* in Sydney is currently $1,686,257 for houses. This is more than 30% higher than prices when the pandemic began.
The average for units is $702,678, which is only a slight drop from figures early in the pandemic.
*SQM Research updates their figures weekly.
The above table is taken from the Corelogic report and provides an overview of the best rental yields in Brisbane.
The COVID pandemic has affected the Brisbane rental market but not as dramatically as in Sydney and Melbourne. Rental prices have remained relatively stable throughout the pandemic, despite a lack of international immigrants. This may be due to an influx of people moving to Brisbane from interstate. Both the Gold Coast and the Sunshine Coast in Queensland were in the top three destinations for internal migrants during the pandemic. The Sunshine Coast experienced the highest annual capital growth in houses nationally.
According to SQM Research data, the gross rental yield in Brisbane is 5.2% for houses and 3.7% for units. The average median sale price* in Brisbane is currently $743,428 for houses. This is almost $100,000 more than the price at the beginning of the pandemic.
The average median sale price for units has remained relatively stable in Brisbane and is currently $397,859.
The above table is taken from the Corelogic report and provides an overview of the best rental yields in Melbourne.
The Greater Melbourne rental market was severely impacted in 2020 with a drop in rental prices of -7%. Not only has Melbourne faced border closures, it has also experienced multiple long lockdowns, which have likely exacerbated the rental price decline. The rental market has dropped further this year but will likely begin to increase once the international borders open to immigrants.
According to SQM Research data, the gross rental yield in Melbourne is 2.5% for houses and 3.4% for units. The average median sale price* in Melbourne is currently $1,104,885 for houses. At the beginning of the pandemic, the average price was just shy of $1,000,000. With a increase of close to 10%, it’s clear that prices in Melbourne have not risen as dramatically as in other states during the pandemic.
For units, the average median sale price in Melbourne is currently $570,695, which is approximately $20,000 higher than early pandemic prices.
The above table is taken from the Corelogic report and provides an overview of the best rental yields in Adelaide.
The Adelaide rental market has experienced rises and falls throughout the pandemic but has remained relatively stable when compared to other states. Rental yields are now on the increase and this trend will likely continue once borders open.
According to SQM Research data, the gross rental yield in Adelaide is 3.9% for houses and 5.5% for units. The average median sale price* in Adelaide is currently $607,817 for houses. Prices remained relatively stable in 2020 but have begun to rise sharply this year in line with national trends.
For units, the average median sale price in Adelaide is currently $322,669, which represents a slight increase since early 2019.
The above table is taken from the Corelogic report and provides an overview of the best rental yields in Perth.
In 2020, the Perth rental market saw rental prices rise sharply by 8.2%. The downward trend that Perth had been experiencing since 2013 ended shortly before the pandemic began and rental prices have been on an upward trend ever since. This cyclical rebound in rents will likely see investors return and rental prices in Perth continuing to climb.
According to SQM Research data, the gross rental yield in Perth is 3.9% for houses and 5.4% for units. The average median sale price* in Perth is currently $700,900 for houses.
For units, the average median sale price in Perth is currently $388,269, which is almost identical to average prices during the early pandemic.
Despite skyrocketing prices, now may actually be a good time to buy. Interest rates are at record lows and are forecast to stay that way for the next few years. The cheaper loans on offer could help offset the higher sale prices.
Interest rates aren’t the only reason to buy now. Prices are forecasted to rise even more in 2022 and international borders will soon be open, restoring the flow of migrants and international students to Australia. This will see empty apartments filling up, may cause rent prices to increase and increase the prices of units and starter homes.
Whether you are buying a home or an investment, now could be perfect timing.
For more information on when to buy, see our time to buy guide. It provides general information, which may not account for COVID. You may be surprised to learn that buying during quieter times may work against you as stock may have dried up, but demand continues to push prices.
If you’re looking at buying another investment property, a quality agent can help you navigate the current property market in your local area. Compare local agents now to find the best agent near you.
If you have a rental property you’re looking to lease out, check out our property management offers here for discounted and flat fee deals.
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