Rental yield measures the annual rental income your investment property generates relative to its total value. It's the key metric for understanding how your asset is performing for you — There are two types of yield:
Calculation = Annual rent ÷ Property value. Great for quick comparison but it doesn't account for real ownership costs.
The real return — subtracts management fees, insurance, maintenance, and other expenses. This is your true ROI.
Smart investors use both: gross yield for initial screening, then net yield for the final decision. But yield isn't everything — a property with modest yield can still be an outstanding long-term investment if capital appreciation is strong.
National rent values rose 1.7% in Q1 2025 — a sharp jump from just 0.4% in Q4 2024. With strong immigration, urban population growth, and rock-solid political stability, demand for rentals continues to outstrip supply across most markets.
While the majority of foreign investors gravitate towards Sydney & Melbourne property, the smaller capitals and regional markets offer better value for money and deliver stronger investor return. The following compares gross yields across Australian capital cities in 2025.
| City | Yields | Houses | Units | Pros | Market Insights |
|---|---|---|---|---|---|
| Darwin | 6.6% | 6.0% | 7.8% | 🔥#1 Yield | NT's resource driven economy produced the highest yields for 2025 with rental-return from units just shy of 8% |
| Hobart | 4.4% | 4.3% | 5.0% | Strong ROI | Solid yields for both houses & units while being among the most affordable entry points into Australia's property market. |
| Perth | 4.3% | 4.2% | 5.7% | 🔥#2 Yield | 2nd best city for Unit yields with high demand from well-paid professionals driving low vacancy rates & reliable income. |
| Canberra | 4.1% | 3.8% | 5.2% | Stable | Low market volatility & steady demand from the government sectors & students sees units outperform houses significantly . |
| Melbourne | 3.7% | 3.2% | 4.8% | High Demand | Strong demand drives low vacancy rates with units generating much higher income relative to purchase price than houses. |
| Brisbane | 3.7% | 3.5% | 4.5% | Fast Growth | One of Australia's fastest-growing cities since 2022 with the gap steadily narrowing between unit & house yields . |
| Adelaide | 3.7% | 3.5% | 4.7% | Afforable | Matching both Brisbane & Melbourne for yield, Adelaide delivers higher affordability than most cities and a growing population |
| Sydney | 3.1% | 2.7% | 4.1% | Capital Growth | Australia's largest rental market has compensated for low yields with exceptional capital growth & near-zero vacancy risk. |
¹ Source: CoreLogic/Domain rental data, Q1 2025. Figures represent gross rental yields.
In Australia, a rental yield between 4% and 6% is generally considered strong. Anything above 6% is exceptional — and you'll find those figures primarily in Darwin and select regional markets.
Across the board, apartment units tend to deliver higher yields than houses. The trade-off? Houses usually offer better long-term capital appreciation. The right choice depends on whether you're optimising for income or wealth building.
The national gross rental yield hit 3.74% in March 2025 — the highest since 2019 — as rents continue to grow faster than property prices. That trend may present a widening window for yield-focused investors.
Key takeaway: Don't chase yield in isolation. The best investment balances rental income, capital growth potential, vacancy risk, and your personal financial strategy.
Median property values across all dwelling types in Australian capital cities.
| Year | Adelaide | ACT | Brisbane | Darwin | Hobart | Melbourne | Perth | Sydney |
|---|---|---|---|---|---|---|---|---|
| 2026 | $947,000 | $878,000 | $1,078,000 | $615,000 | $728,000 | $853,000 | $1,024,000 | $1,247,000 |
| 2024 | $746,758 | $836,538 | $826,105 | $497,652 | $648,091 | $834,614 | $753,579 | $1,162,368 |
| 2022 | $623,069 | $873,691 | $716,339 | $500,090 | $715,202 | $844,329 | $583,990 | $1,112,224 |
| 2020 | $447,683 | $618,076 | $482,325 | $393,863 | $490,120 | $698,057 | $438,011 | $852,950 |
| 2018 | $436,106 | $584,169 | $474,896 | $428,718 | $437,840 | $705,738 | $452,460 | $851,112 |
| 2016 | $405,515 | $525,363 | $453,852 | $482,476 | $338,155 | $593,852 | $472,900 | $773,946 |
| 2014 | $380,363 | $477,027 | $417,121 | $510,499 | $314,878 | $491,528 | $507,758 | $615,450 |
| 2012 | $364,073 | $470,607 | $384,661 | $465,375 | $308,483 | $443,673 | $442,057 | $500,567 |
| 2010 | $381,371 | $470,374 | $414,357 | $459,422 | $317,126 | $460,312 | $466,441 | $493,529 |
Values represent median dwelling prices for April each year from 2010 - 2026 . Source: PropTrack Home Price Index - April 2026
