Yield by capital city (indicative, mid-2026)
- Sydney houses: ~3.3% gross — the lowest yield of any capital, reflecting high prices relative to rent.
- Melbourne: similarly low yields to Sydney among the eastern capitals.
- Perth and Adelaide houses: ~4.0–4.5% gross.
- Brisbane units: ~4.8–5.8% gross, with sub-1% vacancy in many inner and middle-ring areas.
- Darwin: ~6.0–7.5% gross on houses — the highest yield of any capital, though this reflects a smaller, less liquid market with historically weaker long-term capital growth.
- National average gross yield across all residential property sits around 4.7%, having drifted down slightly over the past year as prices grew faster than rents in most markets.
Why yield and growth trade off
Cities and property types with the strongest long-term capital growth (Sydney and Melbourne houses, historically) tend to carry the lowest rental yields, because buyers are willing to accept lower cash returns for stronger expected appreciation. Conversely, markets with high yields (regional centres, Darwin, higher-density units) have often — though not always — delivered weaker long-term capital growth. There's no universally "correct" side of this trade-off; it depends on whether an investor needs cash flow now or is prioritising long-term equity growth, and what their serviceability and risk tolerance allow.
Net yield matters more than gross
Gross yield ignores costs. A property with a 5% gross yield but high strata fees, land tax and management costs can have a materially lower net yield than a 4% gross yield property with minimal holding costs. Always model net yield — gross rent minus rates, insurance, management fees, maintenance, and (where applicable) strata — before comparing two properties on yield alone.
Sources
- SQM Research
- Cotality Home Value Index
- Global Property Guide Rental Yield data
Related: Capital Growth vs Cash Flow · Capital Growth vs Rental Yield guide