For most investors, rental yield is one of the many factors that affect where and how much they can invest in a property. Also known as rental yield, it measures the amount of money that an income-generating building earns over the course of a year.
Finding the best neighborhood with excellent rental returns can be intimidating because the country is made up of hundreds and hundreds of suburbs. To help you get an idea of ??the type of rental yield you can get in Australia, we are rounding out some suburbs with attractive rental yields for homes and units, based on March 2020 data from CoreLogic.
Gungahlin, Australian Capital Territory
Gross rental yield : 4.31% (houses), 6.37% (units)
Gungahlin is located about 30 minutes from the center of Canberra. The vacancy rate in this suburb fell from almost 3% to just 2% over a 12-month period. The city has several medical centers and a shopping district. Restaurants and cafes can also be found in Gungahlin.
With a gross rental yield of 4.31% for houses, large two-bedroom houses are in demand. Studio and bedroom rentals are also gaining popularity, as rents jumped 3%, which translates to average rental yields of 6.37%. The weekly rent announced in Gunghalin is $ 618 for the houses and $ 450 for the units.
Broken Hill, New South Wales
Gross rental yield : 10.58% (houses)
Broken Hill is an inland mining town in New South Wales. Called the "city of silver", Broken Hill is an important mining site. Although it is more than 900 km from Sydney, the city offers various attractions such as sculpture of the living desert.
The suburbs offered investors a potential gain of 19.39% during a five-year average increase in the median property price. The advertised weekly rent for the homes is approximately $ 360, which yields 10.58% based on the median value of the suburbs.
Parap, Northern Territory
Gross rental yield : 4.43% (houses), 8.80% (units)
Parap is an inner suburb of Darwin and is about 3 km north of the CBD. It is also conveniently located southwest of the airport and near the beach. Residents of this suburb are generally wealthy, with an estimated weekly income of around $ 2,000.
The houses in Parap are a little more expensive than the neighboring suburbs, with an announced weekly rent of $ 630. The rental yield of the houses stands at 4.43%. During this time, the units have a rental yield of 8.80%, with an announced weekly rent of $ 440.
Blackwater, Queensland
Gross rental yield : 10.24% (houses)
Blackwater is a small town in central Queensland, a nine-hour drive from Brisbane. The city is known as the "Queensland Coal Capital" and plays a major role in the region's mining industry, having six surface coal mines.
The city's real estate market is booming, with recent figures surpassing the average annual rate over ten years. The median value of homes in Blackwater remains relatively affordable, at less than $ 400,000, with an average gross rental yield of 10.24%.
Port Augusta, South Australia
Gross rental yield : 8.61% (houses)
Port Augusta is located near one of the main crossroads in SA. Its ideal location allows residents to take all directions to get to their workplace. The city is the largest city closest to Olympic Dam, which is a major employer for the people of Port Augusta, according to Mick Gilbert, director of First National Real Estate Port Augusta.
The expansion of the Olympic dam is expected to be completed this year, which will fuel the confidence of city property insiders. They believe the time has now come to invest in this South Australian power.
"If you look at the outlook for Port Augusta over the next five years, it's extremely exciting, especially since Roxby Downs will potentially become the world's largest mine," says John Rejack, director of Century 21 Port Augusta.
The city has a gross rental yield of 8.61%. The three-bedroom homes are the most requested, according to Rejack.
New Norfolk, Tasmania
Gross rental yield : 6.56% (houses), 6.60% (units)
New Norfolk is located southeast of Tasmania on the Derwent River. It is 20 miles from Hobart on the Lyell Highway. The oldest Anglican church in the state, St. Matthews, which was built in 1823, and one of the country's oldest pubs can be found in New Norfolk.
Investors realized an 11% gain for property investments in the suburbs over the past year, which compares favorably to 7.07% for all of Tasmania . Homes in this suburb are relatively affordable, with a median value of $ 219,000. Meanwhile, the weekly rent announced for the houses is $ 350, which gives a rental yield of 6.56%.
New Norfolk has a rental yield of 6.60% for the units – the second best in the state, with weekly rent announced at $ 330.
Morwell, Victoria
Gross rental yield : 7.02% (houses), 5.88% (units)
Located in the south-east of Victoria, Morwell is approximately 143 km from Melbourne. It is the administrative center of the city of Latrobe and is popular for being a major energy production center in Victoria.
By examining the median appreciation of suburban properties in the past three months, Morwell gave real estate investors a paper yield of 0.99%, thus becoming one of the suburbs that appreciate the faster in Victoria.
The median price of homes in Morwell is $ 177,750, with advertised weekly rent of $ 240. The result is a rental return of 7.02%. During this time, the median unit value is 163,500 and the weekly rent announced for the apartments is $ 185, with a yield of 5.88%.
Coolgardie, Western Australia
Gross rental yield : 15.79% (houses)
Coolgardie is located 558 km east of Perth. It was once the third largest city in WA, but in recent times the suburb is known as a tourist and mining area.
The capital gain for investors in this western Australia suburb in the past year has been 1.82%. Looking at Coolgardie's median appreciation for the past three months, the suburbs gave investors a real estate return of 6.33%. The median weekly rent announced for townhouses is $ 255, with a huge rental yield of 15.79%.
Do you want to know more about the different suburbs and their real estate market? Visit the Top Suburb page.
