You may be living in Australia, but there are several suburbs you have not heard of. And some of these unheard suburbs have the highest rental yield in Australia. These suburbs will shock you with the annual rental income they generate for an investment property.
A suburb does not become high yielding overnight. There are factors that contribute to creating high rental yield suburbs. Some of those factors include strong demand for houses, the prospective development ratio of the suburb, rental market growth and supply restriction (terms that can be explored in our summary of investing terms you need to know).
But these are only some of the factors that drive a rental property’s value uphill. Let’s explore what rental yield is and where to find the highest rental yield in Australia.
What is rental yield?
So, what makes a good investment property? Gross rental yield is the profit you make on an investment property. If you want to know how to work out rental yield, compare the price you used to buy your property against the money the property is giving you yearly.
You can also compare the property value against your annual rental income to get the rental yield.
Rental yield is also a percentage of your property’s value.
Highest rental yield in Australia
In this section, we will analyse the suburbs with the best rental yield in NSW and give you information on most rental markets. Hence, you can refer to this section for the best-performing Australian suburbs.
Darwin
As you may know, investing is like monopoly. And Darwin has the best rental yield among Australian suburbs. It dethrones the Northern Territory as the highest-yielding suburb in the country. House prices in Darwin have been recording significant increases since last year.
2021 was a dull year for Darwin with the weekly house rents moving from only $500 to $600. But the price spike in the later months of 2022 took the average weekly asking price for an apartment to $850. But this spike did not last long; the weekly asking price of houses in Darwin was reduced to $700. However, experts suggest that the spikes in rental yield will continue through this year.
Check out more real estate in Darwin NT.
Woolaning
Wooling is about two hours away from Darwin and it has also benefited from the recent price spikes in Darwin. Woolaning suburb has recorded almost double of their regular rental income from previous years.
Fortitude Valley
Naturally, suburbs that are close to central business districts receive a lot of attention. Fortitude Valley is not more than four kilometres away from Brisbane’s CBD. It is located northeast of the city’s CBD. It is a well-known area for nightlife lovers because of several cultural institutions.
If you are looking for an investment property, the units in this area are seeing price increments. The price of units in the area has risen by almost 13%, but the price of houses has dropped over 30%.
Check out more real estate in Fortitude Valley.
Canberra City
Canberra City is a great place to make a property investment. It is in the heart of Australia’s capital and it is dominated by renters. Nearly 69% of Canberra City is occupied by renters. The average weekly rental price for a unit in Canberra City is around $640.
Canberra City is one of the highest rental yield suburbs in the country and a great place to lay some investments.
Check out more real estate in Canberra city.
Rocklea
Only half an hour south of Brisbane CBD, Rocklea is another gem in the rough. The suburb is close to Archerfield Airport which gives the area more value.
The suburb is home to the younger generation with an average age between 20 to 39 years. More than two-thirds of the population are singles with over 46% of the suburb home to renters.
Check out more real estate in Rocklea.
Marangaroo
A suburb could not have a better location; it provides great access to Perth and Joondalup CBDs. Hence, expect to see renters all year round in Marangaroo. The suburb is half an hour from Perth CBD towards the north.
The suburb also provides great access to Whiteman Park and Yellagonga Residential Park.
Check out more real estate in Marangaroo.
Greenway
Just half an hour south of Canberra, Greenway shares a border with New South Wales. It is also a great access point to Lake Tuggeranong and a great location for renters and house owners.
Rentals and houses almost balance each other out with a fifty-fifty split. Singles occupy up to 55% of the suburb while families dominate the remaining 45%.
Check out more real estate in Greenway.
Banksia Grove
Banksia Grove is just a stone’s throw from Joondalup. The suburb is dominated by homeowners while renters hold 23% of the region. Hence, rental properties are extremely scarce. Banksia Grove is a great place to put your money because you will have little to no competition on the market.
The average weekly rental yield is around $550. The suburb has recorded rental growth of over 22%.
Check out more real estate in Banksia Grove.
Maddington
Maddington is located east of Perth and it holds one of the most promising rental markets in Australia. The suburb recorded a massive dip in 2018 but property value has steadily been on the rise since then. House rentals go for $500 weekly while units fall at an average price of $450.
Check out more real estate in Maddington.
FAQs
What state in Australia has the highest rental yield?
The state in Australia with the highest rental yield is typically Tasmania. It has consistently recorded strong rental yields in recent years.
What is a good rental yield in Australia?
A good rental yield in Australia is generally considered to be around 4% or higher. However, what is considered a good rental yield can vary depending on factors such as location, property type, and market conditions.
Where is rent growing the fastest?
Currently, the city of Hobart in Tasmania is experiencing the fastest rent growth in Australia. It has seen significant increases in rental prices due to high demand and limited supply in the housing market.
