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Canberra's rental yields vary significantly between property types, with apartments delivering stronger returns than houses. Units in select suburbs like Hawker and Lyons can yield up to 7%, while houses typically range between 3.6% to 4.4% across different areas.
The Australian capital presents unique investment opportunities due to its stable government employment base and consistently low vacancy rates. As of September 2025, the city-wide average rental yield sits around 4.1%, with distinct variations between inner suburbs and outer areas affecting investment returns.
If you want to go deeper, you can check our pack of documents related to the real estate market in Australia, based on reliable facts and data, not opinions or rumors.
Canberra's rental market offers yields ranging from 3.6% for houses to 5.0% for units, with the highest returns found in specific suburbs like Hawker (7.1% for units) and Belconnen (4.4% for houses).
Property investors can expect total purchase costs exceeding $35,000 on a $1 million property due to stamp duty and fees, while ongoing expenses include property management (6-8% of rent) and landlord insurance averaging $2,056 annually for houses.
| Property Type | Average Yield | Median Price | Weekly Rent |
|---|---|---|---|
| Houses | 3.6% | $942,000 | $650 |
| Units | 5.0% | $580,000 | $565 |
| Townhouses | 3.6% - 4.2% | $750,000 - $850,000 | $600 - $650 |
| City Average | 4.1% | $761,000 | $607 |
| Airbnb Properties | 6.0% - 8.0% | $600,000 - $800,000 | $920/week equivalent |
| Inner Suburbs | 3.2% - 3.8% | $1,200,000+ | $750+ |
What is the current average rental yield in Canberra?
As of September 2025, Canberra's rental yields vary significantly by property type, with the city-wide average sitting at 4.1%.
Houses deliver an average gross rental yield of 3.6%, while apartments significantly outperform with yields averaging 5.0%. Some apartment investments can achieve yields up to 5.1% in select locations, making them the preferred choice for yield-focused investors.
Townhouses typically fall between these two categories, offering yields ranging from 3.6% to 4.2% depending on their location and specific characteristics. The Australian capital's rental market benefits from stable government employment and consistent demand from public servants and contractors.
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How does the yield differ between apartments, townhouses, and houses?
The yield hierarchy in Canberra clearly favors apartments over other property types, with a substantial gap in returns between different housing categories.
Apartments consistently deliver the highest yields at an average of 5.0%, significantly outperforming houses which average only 3.6%. This 1.4 percentage point difference represents substantial additional income for investors choosing apartments over houses.
Townhouses occupy the middle ground with yields typically ranging from 3.6% to 4.2%, depending on their specific location and features. The superior performance of apartments stems from their lower purchase prices relative to rental income, making them more attractive to tenants seeking affordable accommodation in Canberra's expensive housing market.
Houses face the challenge of higher capital values that don't translate proportionally into higher rents, resulting in compressed yields despite often commanding higher absolute rental amounts.
Which suburbs or areas of Canberra have the highest and lowest yields?
Canberra's highest yielding suburbs are concentrated in specific outer areas where property prices remain relatively affordable compared to rental demand.
| Suburb | Property Type | Yield Range |
|---|---|---|
| Hawker | Units | 7.1% |
| Lyons | Units | 7.0% |
| Crace | Units | 6.8% |
| Belconnen | Houses | 4.4% |
| Gilmore/Charnwood/Banks | Houses | 4.3% |
| Inner City Suburbs | All Types | 3.2% - 3.8% |
| Blue-chip Areas | All Types | 3.0% - 3.5% |
How do property size and surface area affect rental yields?
Smaller properties consistently generate higher rental yields in Canberra, following a clear inverse relationship between property size and yield performance.
One-bedroom apartments represent the sweet spot for yield optimization, with examples showing yields around 4.1% for properties priced at $266,100. These smaller units attract strong rental demand from young professionals, students, and single government workers who prioritize location and affordability over space.
Larger houses face the yield compression challenge where purchase prices increase faster than rental rates. A $1 million house might generate $650 weekly rent, while two $500,000 apartments could collectively command higher rental returns with better yield percentages.
The general rule holds that smaller, lower-priced properties yield more because rental rates remain competitive regardless of property value, creating better returns for investors focused on cash flow rather than capital growth.
What is the typical purchase price including fees, taxes, and stamp duty?
Canberra property purchases involve substantial upfront costs that significantly exceed the basic property price, particularly due to the ACT's stamp duty structure.
The median house price in Canberra reaches $1.04 million as of September 2025, while apartments typically cost around $580,000. Stamp duty represents the largest additional expense, with a $1 million property incurring approximately $34,500 in stamp duty alone.
Additional fees include conveyancing costs ranging from $1,500 to $2,400, building inspections costing $500 to $900, and legal fees around $2,000. First home buyers receive no stamp duty concession for properties up to $1 million, unlike many other Australian jurisdictions.
Total upfront costs easily exceed $35,000 on a $1 million house purchase, representing a significant barrier to entry that investors must factor into their initial capital requirements and yield calculations.
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What are the average ongoing costs like maintenance, insurance, and property management?
Canberra property investors face several recurring expenses that directly impact net rental yields, with property management and insurance representing the largest ongoing costs.
Property management fees typically range from 6% to 8% of rental income, translating to approximately $1,600 to $2,300 annually for a property generating $540 weekly rent. These fees cover tenant management, rent collection, maintenance coordination, and regular property inspections.
Landlord insurance averages $2,056 per year for houses and $391 annually for units in the ACT, providing protection against rental default, property damage, and legal disputes. Maintenance costs should be budgeted at approximately 1% of property value annually, meaning a $1 million house requires around $10,000 yearly for upkeep.
Older properties may exceed this maintenance benchmark, while newer developments often require lower initial maintenance but face higher strata fees for apartments and townhouses.
How does taking out a mortgage impact overall net yield compared to buying in cash?
Mortgage financing significantly reduces net rental yields in Canberra's current interest rate environment, with variable rates around 5.54% as of August 2025.
A $600,000 mortgage at 5.5% interest generates approximately $33,000 in annual interest costs, substantially reducing net returns from rental income. For a property generating $33,800 annual rent, the interest alone nearly eliminates the gross yield benefit.
Cash buyers retain the full gross yield minus operating expenses, providing a significant advantage in low-yield markets like Canberra. The break-even point for leveraged investments requires either higher yields or significant capital appreciation to justify the borrowing costs.
Investors must carefully calculate net yields after interest, principal repayments, and tax implications to determine whether leverage enhances or diminishes their investment returns in Canberra's market conditions.
What are the rental returns for short-term lets like Airbnb versus long-term rentals?
Short-term rental platforms like Airbnb can deliver superior gross returns in Canberra, but require significantly more active management and carry higher operational costs.
The average Canberra Airbnb property generates approximately $48,000 annually with a 72% occupancy rate and $183 average daily rate. This substantially exceeds the $33,800 annual income from a median house on long-term rental at $650 weekly.
However, short-term rentals incur additional expenses including professional cleaning, higher utility costs, platform fees, and more intensive property management. Vacancy periods between bookings can be unpredictable, particularly during Canberra's slower tourism periods.
Long-term rentals provide stable, predictable income with minimal management requirements and lower operating costs, making them suitable for passive investors seeking consistent cash flow rather than maximum returns.
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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 are some example rental incomes for different property types in Canberra?
Rental income examples across Canberra's property types demonstrate the clear advantages of apartments and short-term rentals for yield-focused investors.
A median Canberra house generates $650 weekly rent, totaling $33,800 annually before expenses. Apartments typically command $565 weekly, producing $29,380 annual income, while offering superior yields due to lower purchase prices.
High-performing Airbnb properties can achieve $48,000 annually, representing a significant premium over traditional rentals. However, this gross income advantage diminishes when accounting for higher operating costs and vacancy periods between bookings.
One-bedroom apartments in sought-after locations might achieve $450-500 weekly, while three-bedroom houses in premium suburbs can command $800-900 weekly. These variations reflect Canberra's diverse rental market catering to different tenant demographics and location preferences.
What are the vacancy rates across different property types and locations?
Canberra maintains exceptionally low vacancy rates ranging from 0.8% to 2.1% seasonally, reflecting strong rental demand driven by government employment and limited housing supply.
Both houses and apartments experience tight vacancy conditions, though units may face slightly higher seasonal variation due to student accommodation cycles and short-term resident turnover. The Australian capital's stable employment base ensures consistent rental demand throughout economic cycles.
These low vacancy rates provide confidence for investors, as properties typically secure tenants quickly and experience minimal income interruption. The tight rental market also supports rental growth and provides landlords with strong negotiating positions during lease renewals.
Seasonal variations occur primarily in areas with high student populations, where vacancy rates may temporarily increase during university breaks but quickly normalize when students return.
How have rents and yields changed compared to one year ago and five years ago, and what are the forecasts?
Canberra's rental market has experienced modest growth over the past year, with houses recording 1.1% annual rent increases and units achieving 1.6% growth.
| Time Period | Houses Rent Growth | Units Rent Growth | Price Growth |
|---|---|---|---|
| Past 12 months | +1.1% | +1.6% | +3.5% |
| Past 5 years | +25% | +22% | +68% (houses), +53% (units) |
| 2026 Forecast | +2.5% | +3.0% | +4.0% |
| 2025-2030 Forecast | +12% | +15% | +20% |
| 2025-2035 Forecast | +25% | +30% | +45% |
How do Canberra's rental yields compare with other similar Australian cities and what are the smartest investment choices?
Canberra's rental yields position competitively among Australian capitals, particularly for apartment investments, though some regional cities offer superior returns.
Darwin leads apartment yields at 6.6%, followed by Canberra's 5.0%, while Hobart houses achieve 5.1% compared to Canberra's 3.6%. Adelaide offers competitive house yields at 4.9% but lower apartment returns at 3.7%.
The smartest investment choices in Canberra focus on apartments in suburbs like Hawker, Lyons, and Crace, which deliver yields exceeding 6.5%. For house investors, Belconnen and Gilmore offer the best yield prospects at around 4.3-4.4%.
Canberra's investment appeal extends beyond yield considerations, offering political stability, low vacancy rates, consistent government employment, and moderate capital growth prospects that provide total return advantages over higher-yielding but less stable markets.
It's something we develop in our Australia property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Canberra's rental market offers distinct opportunities for yield-focused investors, particularly in the apartment sector where returns consistently exceed house investments.
Success in Canberra property investment requires careful suburb selection, with outer areas like Hawker and Belconnen delivering superior yields compared to premium inner-city locations.
Sources
- Savings.com.au - Highest Rental Yields ACT
- PropertyNXT Australia - Canberra Property Market
- Wise - Best Rental Yield Australia
- OpenAgent - Canberra Property Market
- Global Property Guide - Australian Rental Yields
- Loan Market - Median House Price Canberra 2025
- Money.com.au - ACT Stamp Duty Calculator
- Which Real Estate Agent - ACT Property Management Fees
- Capex Property - Landlord Insurance Costs Australia
- Airbtics - Annual Airbnb Revenue Canberra