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It's been a tough couple of years for Australian tenants. The twelve months to April 2023 saw an unprecedented increase to average rental rates across Australia, and while the pace of growth slowed towards the end of the year, 2024 saw this ramp back up again. January-March '24 saw the highest quarterly increase to rent for houses in 17 years according to Domain, with nearly every capital city at a record high. In an attempt to ease the strain, the 24/25 Federal Budget included a 10% boost to Commonwealth Rent Assistance, and $1.9 billion toward providers of social housing and affordable dwellings.

There are signs things are starting to even out, with the June '24 quarter seeing much softer rent growth, even declining rates in some cities. However, it still remains a very difficult time to be a renter.

The other side of the coin is increasing rental income for investment property owners. While some landlords face restrictions that limit their earning potential, rental yield - the percentage of a property's value it can earn in rent each year - has increased. According to Your Investment Property Magazine data, some Australian suburbs have even cracked 15% in annual rental yield. For investors prioritising cash flow, some of these high yield areas might represent a great opportunity for a positively geared rental property.

See the full list of suburbs

How important are rental yields to property investors?

For investors, rental yield is a useful way to assess annual income, but there are plenty of other things to take into account as well, like vacancy rates, planned investment and other factors that could suggest strong capital gains.

Simon Pressley of Propertyology says basing property investments primarily on rental yields is a "flawed strategy".

"At the end of the day, a few thousand dollars of income per year is nowhere near enough to retire on," Mr Pressley told Savings.com.au.

"But a property that produces strong capital growth means hundreds of thousands of dollars' equity, enabling the investor to repeat the process, plus the option of converting equity into cash during the retirement years."

He said the most important consideration should be selecting an area with good economic fundamentals as this is what drives capital growth.

"The next most important priority is buying a conventional asset - a standard house - in a central part of town. When it comes to sell, the conventional nature will attract a larger resale audience than other assets," Mr Pressley said.

"Apartments produce higher rental yields than a conventional house in the same location, but Propertyology's studies confirm that investing in asset types other than detached houses is surrendering half, or more, of your capital growth potential."

What gives a suburb a strong rental yield?

Rental yield is how much income a property generates relative to its value. It's calculated by dividing the annual rental income a property generates by its market value.

When the value of a property increases dramatically, the rental yield can decrease, because the rental income is smaller relative to the property value, but that doesn't mean the property is earning any less.

Therefore, rental yields tend to be higher in areas where the demand for rent is higher than the demand for owner occupied property. Take Tom Price in the Pilbara region of WA, where rental yields for houses are the highest in the nation. Pilbara is one of Australia's biggest mining regions, with huge deposits of minerals like iron ore. Demand for property is therefore more transient, as miners come and go. In April '24 the average rental yield of a house in Tom Price was 18.4%.

Karratha, Coolgardie and Mount Isa are some of the other LGAs with a heavy mining presence that feature prominently in the below lists.

The majority of the suburbs in the top 100 lists lie outside of the capital cities of the respective states. For houses, only Point Lookout (Brisbane, 18th), Mandogalup (Perth, 28th), Darwin City (78th), Cockburn Central (Perth, 84th) and Gray (Darwin, 86th) made the cut from capital city statistical divisions. For units, as you'd probably expect, the capitals made a slightly better showing. There were 17 Greater Darwin Suburbs, 14 from Perth, four from Melbourne and one each from Brisbane and Canberra that made the list. That still means well over half of the top rental yield suburbs came from regional markets.

Australia rental yields in 2024

Rental yields increase when the cost of renting becomes greater relative to property values. Throughout 2023, property prices increased, but at a lesser rate than rents. Here's how we were sitting as of April '24:

State Area Property Type Median Price Weekly Median Advertised Rent Gross Rental Yield
ACT Metro Houses $950,000 $670 3.7%
ACT Metro Units $600,000 $560 4.9%
NSW Metro Houses $1,425,000 $750 2.8%
NSW Metro Units $780,000 $675 4.5%
NT Metro Houses $592,000 $650 5.8%
NT Metro Units $367,500 $530 7.2%
QLD Metro Houses $880,000 $600 3.7%
QLD Metro Units $605,000 $560 5.2%
SA Metro Houses $786,000 $560 3.9%
SA Metro Units $540,000 $480 4.9%
TAS Metro Houses $665,000 $535 4.0%
TAS Metro Units $540,000 $460 4.5%
VIC Metro Houses $880,000 $550 3.3%
VIC Metro Units $620,000 $540 4.5%
WA Metro Houses $730,000 $640 5.0%
WA Metro Units $500,000 $580 6.6%
NSW Country Houses $740,000 $550 3.9%
NSW Country Units $615,000 $460 3.9%
NT Country Houses $425,000 $550 6.4%
NT Country Units $315,750 $430 7.2%
QLD Country Houses $630,000 $590 5.1%
QLD Country Units $607,000 $525 4.7%
SA Country Houses $430,000 $390 4.9%
SA Country Units $300,000 $300 5.1%
TAS Country Houses $535,000 $440 4.3%
TAS Country Units $417,500 $380 4.8%
VIC Country Houses $580,000 $460 4.2%
VIC Country Units $415,000 $380 4.8%
WA Country Houses $460,000 $600 6.9%
WA Country Units $350,000 $550 8.5%

Source: CoreLogic. Data reported to the period ending June 2024. Median values account for sales transactions over three months.

The outlook for the remainder of 2024 is highly uncertain. Much will depend on the RBA cash rate, which is a significant variable contributing to both property prices and rental rates, since landlords typically pass the cost of higher interest rates on to tenants. Governor Michelle Bullock has been steadfast that the RBA will do "whatever is necessary" to combat inflation. Given the upside surprise in the Q1 inflation read, many analysts now expect that the cash rate will remain at 4.35% at least until next year. Some have even suggested the hiking cycle is not done yet.

Conventional wisdom is that the relationship between interest rates and property prices is inverse: as rates go up, prices go down since borrowing power is reduced. However, the Australian property market defied this in 2023, experiencing strong growth despite several interest rate rises, so there are certainly no guarantees.

As far as rental rates are concerned, Domain Chief of Research and Economics Dr Nicola Powell says a "tipping point" is likely at some stage this year.

"We are seeing the number of prospective tenants per rental listing ease, suggesting some pressure has been lifted," she said.

"This could be an early indicator of an increase in vacancy rates sometime this year."

Read more:

Top 100 rental yield suburbs in Australia for houses

Rank State Postcode Suburb House Median Price Weekly Median Advertised Rent ($) Gross Rental Yield
1 QLD 4804 Collinsville H 160000 368 12%
2 WA 6714 Millars Well H 483750 1100 12%
3 WA 6442 Kambalda East H 147500 330 12%
4 QLD 4825 Mornington H 222500 495 12%
5 WA 6442 Kambalda West H 175000 380 11%
6 WA 6714 Nickol H 560000 1200 11%
7 WA 6714 Baynton H 682500 1400 11%
8 WA 6510 Moora H 187500 380 11%
9 WA 6432 Boulder H 275000 550 10%
10 WA 6714 Pegs Creek H 497500 988 10%
11 WA 6721 Port Hedland H 732250 1450 10%
12 QLD 4000 Brisbane City H 380000 750 10%
13 WA 6167 Mandogalup H 349000 680 10%
14 WA 6415 Merredin H 190000 370 10%
15 WA 6722 South Hedland H 465000 900 10%
16 QLD 4183 Point Lookout H 1800000 3475 10%
17 QLD 4744 Moranbah H 340000 650 10%
18 WA 6728 Derby H 210000 400 10%
19 QLD 4745 Dysart H 205000 390 10%
20 WA 6714 Bulgarra H 499500 950 10%
21 WA 6753 Newman H 325000 600 10%
22 QLD 4825 Pioneer H 220000 405 10%
23 WA 6346 Ravensthorpe H 202500 370 10%
24 QLD 4825 Parkside H 235500 430 9%
25 NSW 2880 Broken Hill H 190000 340 9%
26 WA 6432 Victory Heights H 307500 550 9%
27 QLD 4825 Happy Valley H 270000 480 9%
28 VIC 3490 Ouyen H 187175 328 9%
29 SA 5540 Port Pirie West H 195000 340 9%
30 QLD 4630 Monto H 202500 350 9%
31 WA 6430 West Lamington H 400000 690 9%
32 NSW 2480 South Lismore H 270000 465 9%
33 WA 6430 South Kalgoorlie H 319500 550 9%
34 QLD 4714 Mount Morgan H 215000 370 9%
35 WA 6430 Kalgoorlie H 350000 600 9%
36 WA 6430 Somerville H 484500 820 9%
37 QLD 4825 Townview H 260000 440 9%
38 WA 6315 Wagin H 195000 330 9%
39 QLD 4825 Sunset H 278000 470 9%
40 NSW 2869 Peak Hill H 177500 300 9%
41 QLD 4718 Moura H 225000 378 9%
42 QLD 4824 Cloncurry H 227500 380 9%
43 QLD 4717 Blackwater H 225000 375 9%
44 WA 6348 Hopetoun H 270000 450 9%
45 NSW 2480 Girards Hill H 325000 540 9%
46 WA 6016 Glendalough H 520000 850 9%
47 WA 6430 Piccadilly H 368000 600 8%
48 NT 860 Tennant Creek H 270000 440 8%
49 QLD 4700 Depot Hill H 228000 370 8%
50 WA 6530 Rangeway H 216008.5 350 8%
51 WA 6390 Boddington H 303750 490 8%
52 QLD 4470 Charleville H 169000 273 8%
53 WA 6430 Hannans H 469500 750 8%
54 WA 6725 Bilingurr H 666250 1050 8%
55 QLD 4825 Soldiers Hill H 314500 495 8%
56 WA 6726 Cable Beach H 645000 1000 8%
57 WA 6725 Djugun H 680000 1050 8%
58 QLD 4806 Home Hill H 230000 350 8%
59 SA 5540 Solomontown H 210000 315 8%
60 TAS 7469 Zeehan H 200000 300 8%
61 NT 850 Katherine East H 350000 523 8%
62 QLD 4808 Brandon H 220000 328 8%
63 NSW 2835 Cobar H 212500 315 8%
64 SA 5700 Port Augusta H 216500 320 8%
65 QLD 4723 Capella H 259000 380 8%
66 QLD 4860 East Innisfail H 259750 380 8%
67 TAS 7467 Queenstown H 197000 288 8%
68 QLD 4700 Rockhampton City H 275000 400 8%
69 WA 6164 Cockburn Central H 450000 650 8%
70 WA 6530 Spalding H 277000 400 8%
71 WA 6225 Collie H 320000 460 7%
72 QLD 4850 Ingham H 245000 350 7%
73 WA 6713 Dampier H 790000 1125 7%
74 WA 6317 Katanning H 253000 360 7%
75 SA 5268 Bordertown H 270000 380 7%
76 QLD 4730 Longreach H 242500 340 7%
77 WA 6312 Narrogin H 250000 350 7%
78 QLD 4825 Healy H 410000 573 7%
79 SA 5608 Whyalla Norrie H 215000 300 7%
80 WA 6530 Utakarra H 272500 380 7%
81 WA 6430 Lamington H 450000 620 7%
82 QLD 4472 Blackall H 200000 275 7%
83 SA 5725 Roxby Downs H 285000 390 7%
84 SA 5690 Ceduna H 260000 355 7%
85 QLD 4825 Winston H 295000 400 7%
86 QLD 4487 St George H 255000 345 7%
87 NT 870 Sadadeen H 399500 540 7%
88 QLD 4720 Emerald H 370000 500 7%
89 SA 5608 Whyalla Stuart H 207500 280 7%
90 NT 870 the Gap H 380000 510 7%
91 NT 850 Katherine H 380000 510 7%
92 WA 6710 Onslow H 577500 775 7%
93 QLD 4737 Sarina H 385000 515 7%
94 QLD 4680 Barney Point H 282250 375 7%
95 NT 830 Gray H 400000 530 7%
96 NT 800 Darwin City H 440000 580 7%
97 QLD 4807 Ayr H 255000 335 7%
98 NSW 2480 Lismore H 385000 505 7%
99 SA 5700 Port Augusta West H 267000 350 7%
100 SA 5540 Port Pirie South H 290000 380 7%

Source: CoreLogic. Data reported to the period ending June 2024. Median values account for sales transactions over 12 months.

Top 100 rental yield suburbs in Australia for units

Rank State Postcode Suburb House Median Price Weekly Median Advertised Rent ($) Gross Rental Yield
1 WA 6714 Baynton U 456000 1325 15%
2 QLD 4744 Moranbah U 265000 700 14%
3 SA 5725 Roxby Downs U 130000 310 12%
4 WA 6722 South Hedland U 294500 700 12%
5 WA 6753 Newman U 195000 450 12%
6 WA 6430 Somerville U 260000 600 12%
7 WA 6714 Pegs Creek U 413500 875 11%
8 WA 6714 Bulgarra U 282500 595 11%
9 WA 6020 Sorrento U 275000 575 11%
10 WA 6726 Cable Beach U 350000 700 10%
11 WA 6430 Piccadilly U 243000 480 10%
12 WA 6721 Port Hedland U 426413 838 10%
13 NT 812 Karama U 232500 450 10%
14 QLD 4701 Koongal U 185000 340 10%
15 QLD 4802 Jubilee Pocket U 288750 515 9%
16 QLD 4849 Cardwell U 215000 380 9%
17 NT 830 Gray U 250000 440 9%
18 QLD 4017 Deagon U 220000 385 9%
19 WA 6530 Beresford U 241000 420 9%
20 WA 6725 Broome U 362500 625 9%
21 WA 6430 Kalgoorlie U 291500 500 9%
22 QLD 4720 Emerald U 220000 375 9%
23 WA 6432 Boulder U 265000 450 9%
24 NT 810 Millner U 280000 475 9%
25 WA 6167 Orelia U 230000 390 9%
26 QLD 4870 Manunda U 225000 378 9%
27 QLD 4870 Bungalow U 230000 380 9%
28 QLD 4868 Woree U 225000 370 9%
29 QLD 4811 Idalia U 275000 450 9%
30 NT 800 Darwin U 410000 670 8%
31 WA 6230 Withers U 203000 330 8%
32 QLD 4740 South Mackay U 273000 440 8%
33 NT 832 Bakewell U 280000 450 8%
34 QLD 4869 Edmonton U 250000 400 8%
35 NT 830 Driver U 280000 445 8%
36 NSW 2400 Moree U 176500 280 8%
37 QLD 4812 Hyde Park U 215000 340 8%
38 NT 820 Parap U 367500 580 8%
39 NT 812 Marrara U 306000 483 8%
40 QLD 4814 Cranbrook U 206000 320 8%
41 NT 832 Rosebery U 332000 510 8%
42 QLD 4878 Holloways Beach U 272500 418 8%
43 NT 812 Malak U 275000 420 8%
44 QLD 4680 South Gladstone U 203000 310 8%
45 QLD 4740 North Mackay U 255750 390 8%
46 WA 6016 Glendalough U 345000 525 8%
47 SA 5600 Whyalla U 179000 270 8%
48 WA 6108 Thornlie U 325000 490 8%
49 WA 6163 Hamilton Hill U 365000 550 8%
50 NT 870 Gillen U 300000 450 8%
51 VIC 3000 Melbourne U 420000 630 8%
52 QLD 4812 Hermit Park U 234000 350 8%
53 QLD 4812 Pimlico U 235000 350 8%
54 QLD 4852 Wongaling Beach U 240000 355 8%
55 QLD 4815 Condon U 285000 420 8%
56 WA 6014 Wembley U 340000 500 8%
57 WA 6053 Bayswater U 374500 550 8%
58 QLD 4413 Chinchilla U 246000 360 8%
59 QLD 4810 Railway Estate U 240000 350 8%
60 QLD 4812 Mundingburra U 240000 350 8%
61 NT 832 Bellamack U 350000 510 8%
62 WA 6164 Yangebup U 378000 550 8%
63 WA 6230 East Bunbury U 325000 473 8%
64 NT 870 Araluen U 310000 450 8%
65 QLD 4814 Douglas U 290000 420 8%
66 QLD 4680 New Auckland U 263250 380 8%
67 QLD 4812 Currajong U 215000 310 7%
68 QLD 4814 Garbutt U 250000 360 7%
69 QLD 4805 Bowen U 277500 398 7%
70 QLD 4870 Edge Hill U 290000 415 7%
71 NT 839 Coolalinga U 311000 445 7%
72 WA 6104 Ascot U 412500 590 7%
73 QLD 4740 Mackay U 300750 430 7%
74 WA 6170 Wellard U 358000 510 7%
75 QLD 4610 Kingaroy U 246250 350 7%
76 VIC 3053 Carlton U 352000 500 7%
77 NT 832 Johnston U 360000 510 7%
78 QLD 4680 Glen Eden U 279000 395 7%
79 WA 6107 Cannington U 389000 550 7%
80 WA 6000 Perth U 460000 650 7%
81 WA 6107 East Cannington U 389500 550 7%
82 QLD 4812 Rosslea U 255000 360 7%
83 QLD 4570 Southside U 234000 330 7%
84 WA 6101 East Victoria Park U 427500 600 7%
85 WA 6100 Victoria Park U 407000 570 7%
86 VIC 3660 Seymour U 250000 350 7%
87 VIC 3032 Travancore U 357500 500 7%
88 NT 800 Darwin City U 415000 580 7%
89 WA 6163 Spearwood U 372500 520 7%
90 QLD 4740 Blacks Beach U 337500 470 7%
91 WA 6105 Cloverdale U 395000 550 7%
92 QLD 4802 Cannonvale U 359250 500 7%
93 QLD 4870 Earlville U 302500 420 7%
94 WA 6104 Redcliffe U 396500 550 7%
95 WA 6210 Dudley Park U 350000 485 7%
96 WA 6030 Clarkson U 397000 550 7%
97 NT 810 Coconut Grove U 361000 500 7%
98 QLD 4870 Manoora U 276000 380 7%
99 WA 6003 Northbridge U 460000 630 7%
100 QLD 4740 West Mackay U 336000 460 7%

Source: CoreLogic. Data reported to the period ending June 2024. Median values account for sales transactions over 12 months.

First published on January 2022

Image by Jorge Láscar on Flickr



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