Authored by the expert who managed and guided the team behind the Australia Property Pack
Everything you need to know before buying real estate is included in our Australia Property Pack
If you're buying a rental property in Australia, one of the first questions is: what return can I actually expect?
We wrote this guide to give you clear, current numbers on rental yields across Australian cities and neighborhoods.
We constantly update this blog post to reflect the latest market data.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Australia.
Insights
- Australia's national gross rental yield sits at around 4.0% in early 2026, but Perth investors can find pockets reaching 5.5% to 6.0% thanks to vacancy rates as low as 0.7%.
- The gap between gross and net yield typically runs 0.8 to 1.3 percentage points, with land tax in Victoria and NSW being the biggest variable that catches new investors off guard.
- Units and apartments consistently outperform houses on yield by about 0.5 to 1.0 percentage points because purchase prices are lower while rents hold steady.
- Hobart has Australia's tightest rental market at just 0.4% vacancy, but this scarcity often pushes purchase prices up enough to compress yields.
- Sydney Metro West stations at Westmead, Five Dock, and Parramatta are attracting investor attention, with these corridors likely to see rent support as construction progresses.
- Brisbane's Cross River Rail is reshaping rental demand around Woolloongabba and Boggo Road, creating commuter-friendly micro-markets where yields beat inner-city averages.
- Property management fees typically run 6% to 9% of rent plus GST, but the real cost comes from letting fees of one to two weeks' rent each time you find a new tenant.
- A realistic vacancy buffer for Australian landlords in 2026 is two to four weeks of rent per year, even though official vacancy rates look tight at 1.4% nationally.
What are the rental yields in Australia as of 2026?
What's the average gross rental yield in Australia as of 2026?
As of early 2026, the average gross rental yield in Australia sits at approximately 4.0%, meaning investors earn about $4 in annual rent for every $100 of property value before expenses.
Most typical residential properties fall within a realistic range of 3.6% to 4.6% gross yield, depending on location and property type.
This positions Australia slightly below some other developed markets, largely because property prices have grown faster than rents over the past decade.
The biggest factor shaping gross yields right now is the tight vacancy environment at just 1.4% nationally, which supports rents but cannot push yields higher when purchase prices remain elevated.
What's the average net rental yield in Australia as of 2026?
As of early 2026, the average net rental yield in Australia falls between 2.7% and 3.2%, with most investors clustering around 3.0% after accounting for recurring ownership costs.
The typical gap between gross and net yield runs about 0.8 to 1.3 percentage points, meaning landlords keep roughly 70% to 80% of gross rental income after management, rates, insurance, and maintenance.
The expense that most significantly reduces gross to net yield is state-based land tax, particularly in NSW and Victoria where tiered rates take a meaningful bite once land values cross certain thresholds.
Realistic net yields range from about 2.5% in premium suburbs to 3.5% in well-chosen value corridors where purchase prices are more modest relative to rents.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Australia.
We made this infographic to show you how property prices in Australia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What yield is considered "good" in Australia in 2026?
In Australia's stable property market, a gross rental yield of 4.5% or above is generally considered "good," while 5.5% or higher is very strong and typically comes with trade-offs like less desirable locations or older properties.
The threshold separating average from high-performing properties sits around 4.5% gross, meaning properties below this are often bought for capital growth rather than cash flow.
How much do yields vary by neighborhood in Australia as of 2026?
As of early 2026, gross rental yields vary by 2 to 4 percentage points between neighborhoods, ranging from around 2.5% in prestige suburbs to 6.0% in affordable commuter belts with strong renter demand.
The highest yields come from affordable middle-ring and outer suburbs near transport and employment nodes: Parramatta, Blacktown, and Liverpool in Sydney; Werribee and Sunshine in Melbourne; Logan and Ipswich in Brisbane; Joondalup and Rockingham in Perth.
The lowest yields appear in premium blue-chip suburbs: Double Bay, Vaucluse, and Mosman in Sydney; Toorak and Brighton in Melbourne; New Farm and Ascot in Brisbane; Cottesloe in Perth.
Yields vary dramatically because prestige suburbs command premium prices that rents cannot match proportionally, while affordable areas offer lower entry costs without rents falling by the same margin.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Australia.
How much do yields vary by property type in Australia as of 2026?
As of early 2026, gross rental yields range from about 3.5% for detached houses up to 5.5% for well-located units and apartments, with townhouses and villas falling in between.
Units and apartments deliver the highest average gross yields because their purchase prices are significantly lower than houses while weekly rents don't drop proportionally.
Detached houses deliver the lowest average gross yields because land values push purchase prices well above what rental income can justify from a cash-flow perspective.
The key reason yields differ between property types is affordability: renters facing budget constraints choose smaller attached dwellings, keeping demand and rents strong for units even as their prices remain more accessible.
By the way, you might want to read the following:
What's the typical vacancy rate in Australia as of 2026?
As of early 2026, the average residential vacancy rate in Australia sits at approximately 1.4% nationally, representing a tight rental market where landlords have good pricing power and minimal downtime.
Vacancy rates range widely: from extremely tight at 0.4% in Hobart and 0.7% in Perth, to slightly looser at 1.8% in Sydney and 2.0% in Melbourne.
The main factor driving vacancy rates is strong population growth, particularly from migration, running up against limited new housing supply.
Australia's 1.4% vacancy sits well below a balanced market (typically around 3%), meaning renters face more competition and landlords enjoy favorable conditions compared to many international markets.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Australia.
What's the rent-to-price ratio in Australia as of 2026?
As of early 2026, the average rent-to-price ratio in Australia is approximately 0.33% monthly, translating to around 4.0% annually, the same concept as gross rental yield expressed differently.
For buy-to-let investors, a monthly rent-to-price ratio of 0.38% or higher (4.5% gross yield) is generally considered favorable, typically allowing the property to cover costs and generate positive cash flow.
Australia's rent-to-price ratio sits lower than many emerging markets (0.5% to 0.8% monthly), reflecting its status as a stable, low-risk destination where investors accept lower yields for security and capital growth potential.
We have made this infographic to give you a quick and clear snapshot of the property market in Australia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which neighborhoods and micro-areas in Australia give the best yields as of 2026?
Where are the highest-yield areas in Australia as of 2026?
As of early 2026, the highest-yield neighborhoods include Perth's Morley-Ellenbrook corridor, Brisbane's Logan area including Woodridge, and Sydney's western suburbs like Blacktown and Penrith, combining affordable entry prices with solid renter demand.
In these top-performing areas, gross rental yields typically range from 4.5% to 6.0%, with some well-bought properties in Ellenbrook, Springfield, or Liverpool occasionally reaching higher when vacancy is tight.
What these high-yield suburbs share is lower purchase prices relative to capital city averages, proximity to major employment or transport infrastructure, and consistent demand from working families and essential workers.
You'll find a much more detailed analysis of the areas with high profitability potential in our property pack covering the real estate market in Australia.
Where are the lowest-yield areas in Australia as of 2026?
As of early 2026, the lowest-yield neighborhoods include Sydney's Double Bay, Vaucluse, and Bondi; Melbourne's Toorak and Brighton; and Brisbane's New Farm and Ascot, where prestige prices far outpace achievable rents.
In these premium suburbs, gross rental yields typically range from just 2.5% to 3.5%, meaning modest cash returns despite paying millions for properties.
Yields are compressed because buyers pay a significant premium for lifestyle, prestige, and capital growth potential rather than rental income.
Buying a property in a low-yield area is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Australia.
Which areas have the lowest vacancy in Australia as of 2026?
As of early 2026, the neighborhoods with lowest vacancy include inner Hobart suburbs like Sandy Bay and Battery Point, Perth's middle-ring areas such as Subiaco and Victoria Park, and Adelaide's inner north including Prospect.
In these supply-constrained suburbs, vacancy rates often sit below 1.0%, and in Hobart's tightest pockets they drop to nearly 0.4%.
The main demand driver is a combination of employment proximity, lifestyle appeal, and genuine housing scarcity, with limited new construction unable to keep pace with population growth.
The trade-off when targeting these low-vacancy suburbs is that scarcity also pushes purchase prices up, which can compress yields and reduce expected cash-flow advantages.
Which areas have the most renter demand in Australia right now?
The neighborhoods with strongest renter demand include Sydney's Parramatta and Westmead health precinct, Melbourne's Parkville university and hospital corridor, Brisbane's Woolloongabba and inner south, and Perth's Morley area along the new rail line.
The renter profile driving most demand is young professionals, healthcare workers, students, and small families prioritizing access to employment nodes, universities, hospitals, and public transport.
In these high-demand suburbs, well-priced rentals typically receive multiple applications within days, with properties often filled within one to two weeks.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Australia.
Which upcoming projects could boost rents and rental yields in Australia as of 2026?
As of early 2026, the top infrastructure projects expected to boost rents include Sydney Metro West (stations at Westmead, Parramatta, Five Dock), Western Sydney International Airport opening in 2026, and Brisbane's Cross River Rail.
Neighborhoods most likely to benefit include Westmead and Sydney Olympic Park, the Badgerys Creek and St Marys corridor near the new airport, Woolloongabba and Boggo Road in Brisbane, and Ellenbrook and Morley in Perth along METRONET.
Once completed, investors might realistically expect rent increases of 5% to 15% above baseline growth in directly affected station catchments.
You'll find our latest property market analysis about Australia here.
Get fresh and reliable information about the market in Australia
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What property type should I buy for renting in Australia as of 2026?
Between studios and larger units in Australia, which performs best in 2026?
As of early 2026, two-bedroom units tend to outperform studios when balancing yield and occupancy stability, because they attract a broader tenant pool while maintaining competitive yields.
Studios typically deliver gross yields of 4.5% to 5.5% (roughly AUD $20,000 to $28,000, USD $13,000 to $18,000, EUR $12,000 to $17,000 annually), while two-bedroom units yield 4.0% to 5.0% with lower vacancy risk.
Two-bedroom units outperform because of tenant pool breadth: studios appeal mainly to singles and students, while two-bedrooms attract couples, sharers, and small families.
Studios can be the better choice in inner-city locations near universities or hospitals where young professionals create concentrated demand for smaller, affordable rentals.
What property types are in most demand in Australia as of 2026?
As of early 2026, the most in-demand property type is the well-located two-bedroom unit or apartment, hitting the sweet spot of affordability for renters while offering investors solid yields.
The top three property types by tenant demand are: two-bedroom apartments in transport-accessible locations, three-bedroom townhouses in family-friendly suburbs, and affordable detached houses in outer metropolitan areas.
The primary trend driving this demand is affordability pressure: with rents and living costs rising, renters increasingly choose compact, well-located dwellings over larger homes.
One property type currently underperforming is the large four-bedroom house in outer suburbs with poor transport links, as these sit vacant longer and attract fewer applications.
What unit size has the best yield per m² in Australia as of 2026?
As of early 2026, units in the 45 to 65 square meter range deliver the best gross rental yield per square meter, as these compact one to two bedroom apartments maximize rent relative to floor area.
For this optimal size, gross rental yield per square meter typically runs around AUD $350 to $450 annually (roughly USD $230 to $290 or EUR $210 to $270).
Smaller or larger units have lower yield per square meter because rent doesn't scale linearly with size: a 90 square meter apartment rarely commands twice the rent of a 45 square meter unit.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Australia.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What costs cut my net yield in Australia as of 2026?
What are typical property taxes and recurring local fees in Australia as of 2026?
As of early 2026, annual property taxes for a typical Australian rental apartment include council rates of around AUD $1,500 to $3,000 (USD $1,000 to $2,000, EUR $900 to $1,800) plus water service charges of AUD $600 to $1,200, with land tax adding significantly more depending on state and property value.
Beyond rates and water, landlords must budget for strata levies on apartments (often AUD $2,000 to $6,000+ annually) and land tax, which in NSW and Victoria can range from zero to several thousand dollars.
These taxes and fees typically represent around 15% to 25% of gross rental income, with land tax being the biggest variable.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Australia.
What insurance, maintenance, and annual repair costs should landlords budget in Australia right now?
Annual landlord insurance costs around AUD $1,200 to $3,000 (USD $800 to $2,000, EUR $720 to $1,800), varying by property type, location, and coverage, with higher costs in cyclone or flood-prone areas.
Budget approximately 5% to 10% of annual rental income for maintenance and repairs, roughly AUD $1,500 to $4,000 (USD $1,000 to $2,600, EUR $900 to $2,400) per year.
The repair expense that most catches landlords off guard is hot water system replacement at AUD $1,500 to $3,000, along with unexpected plumbing issues in older properties.
Combined, budget AUD $3,000 to $7,000 per year (USD $2,000 to $4,600, EUR $1,800 to $4,200) for insurance, maintenance, and repairs.
Which utilities do landlords typically pay, and what do they cost in Australia right now?
In most Australian rentals, tenants pay electricity and gas usage, while landlords typically cover water supply charges (tenants pay usage in most states) and sometimes electricity for common areas.
For landlord-paid utilities, monthly costs usually range from AUD $50 to $150 (USD $33 to $100, EUR $30 to $90) for water supply and common area electricity.
What does full-service property management cost, including leasing, in Australia as of 2026?
As of early 2026, full-service property management typically costs 6% to 9% of weekly rent plus GST, roughly AUD $150 to $280 per month (USD $100 to $185, EUR $90 to $170) for a property renting at $600/week.
On top of management fees, property managers charge a letting fee of one to two weeks' rent when finding a new tenant, adding AUD $600 to $1,200 (USD $400 to $800, EUR $360 to $720) at turnover.
What's a realistic vacancy buffer in Australia as of 2026?
As of early 2026, landlords should set aside approximately 4% to 8% of annual rental income as a vacancy buffer, because turnover and reletting still create gaps even with tight 1.4% national vacancy.
In practical terms, most landlords experience two to four vacant weeks per year accounting for lease changeovers, inspections, and time to find quality tenants.
Buying real estate in Australia can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
What sources have we used to write this blog article?
Whether it's in our blog articles or market analyses in our property pack about Australia, we rely on strong methodology and don't throw out numbers at random.
Below we've listed the authoritative sources we used and explained how we used them.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| SQM Research | One of Australia's most-cited providers of rental vacancy and asking-rent data. | We used SQM's national rent average and vacancy rates as our primary rental market anchors. We relied on their methodology to explain vacancy calculations. |
| Domain Rental Report | A major national property portal with extensive listings data and transparent reporting. | We used Domain to compare rent levels and vacancy across capitals. We applied these differences to explain yield variations by location. |
| PropTrack Home Price Index | Publishes a methodology-backed hedonic price index from broad sales data. | We used PropTrack's national home price as our countrywide price anchor for yield calculations. |
| ABS Total Value of Dwellings | The Australian Bureau of Statistics is the official government statistics agency. | We used ABS data to cross-check national price levels against private indexes. |
| RBA Household Sector Chart Pack | The Reserve Bank of Australia is a primary source for macro housing context. | We used RBA data for context on household finances and interest rates influencing investor expectations. |
| ABS Rental Market Insights | Official ABS explanation of how they measure rents for the Consumer Price Index. | We used it to understand how advertised rents differ from in-place rents. |
| OECD Housing Prices Indicators | A trusted international organization that standardizes housing indicators. | We used OECD methodology to anchor price-to-rent ratio concepts in a global framework. |
| Revenue NSW Land Tax | The official NSW government source for land tax rules. | We used it to show land tax is state-based and threshold-based, and built cost ranges for NSW investors. |
| SRO Victoria Land Tax Rates | The official Victorian government source for land tax schedules. | We used it to show how land tax costs step up with land value in Victoria. |
| Queensland Revenue Office Land Tax | The official Queensland government source for land tax rules. | We used it to anchor Queensland investor holding-cost assumptions. |
| WA Treasury Land Tax Assessment | The official Western Australian government explanation of land tax. | We used it to anchor net-yield costs for Perth properties. |
| AER Default Market Offer | The Australian Energy Regulator is the national energy regulator. | We used it to ground utility costs using regulated reference prices. |
| DHA/Oxford Economics Fee Comparison | A government-linked portfolio manager using structured research from a major consultancy. | We used it to anchor property management fee structures beyond headline percentages. |
| Victoria's Big Build Metro Tunnel | The official project page for one of Australia's biggest transit upgrades. | We used it to identify Melbourne station precincts that could see rent support. |
| Sydney Metro West | The official Sydney Metro source listing confirmed stations. | We used it to identify Sydney micro-areas benefiting from new station access. |
| Western Sydney International Airport | The official airport development source with direct statements on timing. | We used it to identify the Western Sydney demand corridor likely to see rental changes. |
| Cross River Rail | The official project update source for Brisbane's biggest inner-city rail upgrade. | We used it to name Brisbane station precincts where access improvements support rents. |
| METRONET Morley-Ellenbrook Line | The official WA source listing stations for a major new rail line. | We used it to point to Perth micro-areas where new stations reshape rental demand. |
| ATO Rental Expenses Guide | The Australian Taxation Office is the official authority for landlord expenses. | We used it to explain common landlord costs matching official ATO guidance. |
| Insurance Council of Australia Fact Pack | The peak body for general insurers providing well-sourced industry statistics. | We used it to justify why insurance and maintenance budgets have risen. |
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