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Wollongong's rental market delivers yields between 3.3% and 4.5% depending on property type and location. Units consistently outperform houses with yields reaching 4.5% in areas like West Wollongong, while houses typically yield 3.3-3.8% across the city. The extremely tight vacancy rate below 1% drives strong rental demand, particularly near the University of Wollongong where student accommodation generates the highest returns.
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Wollongong's rental yields range from 3.3% for houses to 4.5% for units, with the tightest rental market in Australia driving consistent demand.
Short-term rentals can achieve gross yields up to 17%, but new regulations and management costs significantly impact net returns.
| Property Type | Average Yield | Weekly Rent | Median Price | Best Areas |
|---|---|---|---|---|
| Units/Apartments | 4.0-4.5% | $600-$750 | $547,000-$690,000 | West Wollongong, North Wollongong |
| Houses (3-bed) | 3.3-3.8% | $750-$900 | $900,000-$1.2M | Fairy Meadow, Keiraville |
| Townhouses | 3.5-4.0% | $650-$800 | $700,000-$900,000 | Dapto, Wongawilli |
| Student Accommodation | 4.5-5.0% | $250-$300/room | Varies | University precinct areas |
| Short-term Rentals | 16-17% (gross) | $200-$300/night | $900,000-$1.2M | Beachside suburbs |
What are the current rental yields for different property types in Wollongong?
As of September 2025, Wollongong rental yields vary significantly by property type, with units delivering the strongest returns for investors.
Units and apartments achieve the highest yields at 4.0-4.5%, with premium performers in suburbs like West Wollongong reaching up to 4.5%. This strong performance stems from high demand from students and young professionals combined with lower entry prices compared to houses.
Houses across Wollongong deliver yields between 3.3-3.8%, with family suburbs and beachside areas typically at the lower end (3.0-3.5%) but offering stronger long-term capital growth potential. Three-bedroom houses specifically yield 3.5-3.8% when purchased in the $900,000-$1.2 million range.
Townhouses sit in the middle ground, offering yields close to 3.5-4.0% depending on location and amenities. These properties appeal to families seeking more space than units while remaining more affordable than standalone houses.
Short-term rentals present a different opportunity entirely, with gross rental yields reaching 16-17% for well-positioned three-bedroom houses in high-demand beachside locations, though new 2025 regulations and management requirements significantly impact net returns.
How do rental yields differ across Wollongong's suburbs and areas?
Wollongong's rental yields show clear geographic patterns, with proximity to key amenities driving the strongest returns.
The highest yields concentrate near the University of Wollongong, particularly in North Wollongong, Fairy Meadow, and Keiraville where strong student and academic staff demand supports consistent rental income. These university-adjacent areas benefit from year-round occupancy and willing tenants.
Developing suburbs like Dapto and Wongawilli also deliver strong yields due to lower purchase prices combined with growing tenant demand as the area develops. These locations offer excellent value for investors seeking higher returns.
Beachside and premium inner suburbs including Thirroul and Austinmer typically produce lower yields but offer superior capital growth prospects. These areas attract lifestyle-focused tenants willing to pay premium rents, though property prices remain elevated.
Port Kembla presents unique opportunities with strong short-term rental yields partly driven by worker accommodation demand from the industrial sector. The area benefits from consistent demand from temporary workers and contractors.
What are the current weekly and monthly rents for each property type?
Wollongong rental prices reflect the city's tight market conditions, with rents rising approximately 7.4-10% year-on-year across all property types.
| Property Type | Weekly Rent (AUD) | Monthly Rent (AUD) | Typical Size |
|---|---|---|---|
| Houses (overall) | $680-$700 | $2,720-$2,800 | 3-4 bedrooms |
| Houses (3-bedroom) | $750-$900 | $3,000-$3,600 | 150-200sqm |
| Units/Apartments | $600-$750 | $2,400-$3,000 | 1-2 bedrooms |
| Units (2-bedroom) | $585-$621 | $2,340-$2,484 | 80-120sqm |
| Townhouses | $650-$800 | $2,600-$3,200 | 2-3 bedrooms |
| Student Accommodation | $250-$300/room | $1,000-$1,200/room | Individual rooms |
| Short-term (per night) | $200-$300 | $6,000-$9,000 | Whole property |
What do vacancy rates look like across different property types and areas?
Wollongong experiences one of Australia's tightest rental markets with vacancy rates sitting below 1% across all property types as of September 2025.
Premium central locations and university-adjacent suburbs maintain essentially zero vacancy for quality properties. Well-maintained units near the University of Wollongong and modern apartments in the CBD rarely spend more than a week on the market.
Family homes in established suburbs like Figtree, Mangerton, and Bulli also experience minimal vacancy, typically finding tenants within 2-3 weeks of listing. The demand from families relocating from Sydney drives consistent interest in these areas.
Even developing areas like Dapto and outer suburbs maintain low vacancy rates as demand continues to outstrip supply across the entire Wollongong region. This market tightness provides investors with confidence in consistent rental income.
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Who are the typical renters in Wollongong and what properties do they prefer?
Wollongong's diverse rental market serves multiple distinct tenant segments, each with specific property preferences and requirements.
Students, particularly international students, represent a major tenant group preferring units, apartments, and shared houses near the University of Wollongong. They prioritize proximity to campus, public transport, and affordable rent, often accepting smaller spaces for convenience and cost savings.
Young professionals working in Wollongong's growing tech and service sectors favor two-bedroom apartments in the CBD, beachside locations, and areas with good transport links. They value modern amenities, proximity to entertainment precincts, and lifestyle features like beach access.
Families typically rent three to four-bedroom homes in suburbs with good schools such as Figtree, Mangerton, and Bulli. They prioritize space, safety, school catchments, and family-friendly neighborhoods with parks and recreational facilities.
Medical professionals working at Wollongong Hospital specifically seek accommodation near the hospital in areas like Figtree and Mount Ousley. They often prefer modern apartments or townhouses with easy commuting access.
Short-term renters including tourists, visiting academics, and contract workers prefer professionally managed townhouses or houses near the beach or CBD, prioritizing furnished properties with flexible lease terms.
How do rental yields change based on property size and surface area?
Property size significantly impacts rental yields in Wollongong, with smaller properties generally delivering higher percentage returns on investment.
Smaller units and student accommodation properties achieve the highest yields when rented by the room, as multiple tenants sharing facilities can pay more in total than a single household. A three-bedroom unit rented to students at $300 per room generates $900 weekly compared to $650-700 for the same property rented to a family.
Two-bedroom apartments in the 80-120 square meter range typically deliver optimal yields around 4.0-4.5%, balancing rental income with purchase price. These properties appeal to couples, small families, and professionals sharing accommodation.
Larger houses with four or more bedrooms in premium suburbs deliver lower yields (3.0-3.5%) due to higher purchase prices, but offer better long-term capital appreciation. These properties often target affluent families willing to pay premium rents for space and location.
Medium-sized three-bedroom houses around 150-200 square meters provide balanced yields near 3.5-3.8%, appealing to the broad family rental market while maintaining reasonable purchase prices for investors.
What are the total costs involved in buying a property in Wollongong?
Purchasing property in Wollongong involves significant upfront costs and ongoing expenses that investors must factor into their yield calculations.
| Cost Category | Houses | Units/Apartments | Timing |
|---|---|---|---|
| Purchase Price (median) | $1.1-1.26M | $547,000-690,000 | Upfront |
| Stamp Duty | $44,000-63,000 | $22,000-35,000 | Upfront |
| Legal/Conveyancing | $2,000-3,000 | $2,000-3,000 | Upfront |
| Building/Pest Inspection | $400-800 | $400-600 | Upfront |
| Strata Fees | N/A | $2,000-4,000/year | Ongoing |
| Council Rates | $1,800-2,400/year | $1,600-2,000/year | Ongoing |
| Insurance | $1,200-2,000/year | $800-1,500/year | Ongoing |
| Maintenance | $11,000-12,600/year | $5,500-7,000/year | Ongoing |
How do mortgage repayments affect actual rental yields for investors?
Mortgage financing significantly impacts the actual returns investors receive from Wollongong rental properties, particularly in the current interest rate environment.
With a 20% deposit on a $700,000 unit at current interest rates around 4.10%, monthly mortgage repayments reach approximately $3,200. This often exceeds rental income of $2,400-3,000 monthly, creating negative cash flow scenarios for many investors.
However, investors benefit from building equity through mortgage principal repayments and potential capital growth over time. The tax deductibility of interest payments also improves the effective return for many investors, particularly those in higher tax brackets.
Higher interest rates directly reduce net rental returns and actual yields when leveraging with mortgages. A 1% increase in interest rates can reduce net yields by 0.5-0.8%, making property selection and timing crucial for leveraged investors.
Cash purchasers achieve the full gross yield without mortgage impacts, making yields of 3.3-4.5% more attractive for investors with sufficient capital. This approach eliminates interest rate risk and provides immediate positive cash flow.
How do short-term and long-term rental yields compare in Wollongong?
Wollongong offers investors two distinct rental strategies with significantly different risk-return profiles and management requirements.
Short-term rentals through platforms like Airbnb can achieve gross yields of 16-17% in sought-after beachside locations, particularly for well-presented three-bedroom houses. However, new 2025 regulations including a 7.5% levy on bookings and increased compliance requirements substantially impact net profitability.
Management costs for short-term rentals typically consume 15-20% of gross income, while variable occupancy rates, cleaning expenses, and higher maintenance from frequent turnover further reduce net returns. Successful short-term rental operators often achieve net yields of 8-12% after all expenses.
Long-term rentals provide more stable yields between 3.3-4.5% with significantly lower management costs and regulatory complexity. Investors benefit from predictable income, minimal vacancy risk in Wollongong's tight market, and reduced time commitment for property management.
The choice between strategies depends on investor risk tolerance, available time for management, and local council regulations that may restrict short-term rental operations in certain areas.
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How have Wollongong rents and yields changed over recent years?
Wollongong's rental market has experienced substantial growth over both short-term and long-term periods, with different trends for rents versus yields.
Over the past year, rents have surged 7.4-10% across all property types, driven by extremely tight vacancy rates and strong demand from both local renters and Sydney relocators. This rapid rent growth has helped maintain and slightly improve yields despite rising property prices.
Units have seen yields rise slightly over the past year as rent increases outpaced price growth in some suburbs, particularly areas near the university where student demand remained strong throughout 2024-2025.
Looking at the five-year trend, house prices have increased 53% while rents have risen 58%, keeping yields relatively stable. However, houses have generally seen yield compression due to faster capital appreciation compared to rental growth.
The period from 2020-2025 marked exceptional growth driven by the pandemic-induced sea change movement, record low interest rates, and Wollongong's growing appeal as a lifestyle alternative to Sydney with more affordable housing options.
What are the forecasts for Wollongong rents and yields over the next decade?
Wollongong's rental market outlook remains positive for the next decade, though growth rates are expected to moderate from recent exceptional levels.
For the next year through 2026, expect 3-7% property price growth with modest rent increases as demand remains high but affordability constraints begin to impact some tenant segments. Yields may rise slowly as increased government housing supply initiatives provide some market balance.
The five-year outlook through 2030 suggests moderate continued growth, with yields potentially increasing slightly for units while remaining flat for houses. Population growth, ongoing Sydney spillover demand, and limited land supply will support rental demand, though affordability will limit extreme rent growth.
Over the ten-year horizon to 2035, Wollongong is expected to benefit from major infrastructure investments including transport upgrades and potential high-speed rail connections to Sydney. These developments could drive both capital growth and rental demand, particularly in areas with improved connectivity.
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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.
How do Wollongong's rental yields compare with other similar Australian cities?
Wollongong's rental yields position competitively among mid-sized Australian cities, though they don't lead the market in pure yield terms.
| City | House Yield (%) | Unit Yield (%) | Median House Price (AUD) | Population |
|---|---|---|---|---|
| Wollongong | 3.3-3.8% | 4.0-4.5% | $1.1-1.26M | 300,000+ |
| Newcastle | ~3.7% | ~4.3% | $837,000 | 320,000+ |
| Geelong | ~3.9% | ~4.6% | $850,000 | 280,000+ |
| Sunshine Coast | ~3.5% | ~4.0% | $1.05M | 330,000+ |
| Central Coast | ~3.4% | ~4.1% | $950,000 | 340,000+ |
Wollongong yields trail regional centers like Geelong and some Newcastle suburbs but significantly exceed Sydney's yields of 2.5-3.0%. The city offers a compelling balance of yield, capital growth potential, and lifestyle appeal that attracts both investors and owner-occupiers.
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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.
Wollongong's rental market in 2025 represents a compelling opportunity for property investors seeking balanced returns in a growth market. With yields ranging from 3.3% for houses to 4.5% for units, the city offers competitive returns supported by Australia's tightest rental market and sustained demand from students, professionals, and Sydney relocators.
The key to success lies in understanding the distinct characteristics of each suburb and property type. University-adjacent areas deliver the highest yields for units, while beachside locations offer capital growth potential alongside moderate yields. With vacancy rates below 1% and strong population growth forecast, Wollongong presents a stable foundation for long-term rental property investment.
Sources
- BambooRoutes - Wollongong Property Market Analysis
- BambooRoutes - Wollongong Price Forecasts
- The Illawarra Buyers Agent - Rental Yields Guide 2025
- SQM Research - Wollongong Weekly Rents
- BambooRoutes - Wollongong Real Estate Market
- SQM Research - Wollongong Vacancy Rates
- MMJ Real Estate - Interest Rates Impact 2025
- Airbtics - Wollongong Airbnb Revenue Analysis
- InvestorKit - Wollongong Market Review
- Coposit - Investment Property Trends 2025