Guide
What is a good rental yield in Australia?
A good rental yield depends on the city, the type of property and what you want the investment to do. Here's how to work yield out, what typical yields look like, and how to weigh yield against growth.
By Mossy Taheri, licensed buyer’s agent · Updated
The short answer
In 2026, a gross rental yield of 4% or more is solid for a house in most capital cities, and 5% or more for a unit. Capital city house yields range from about 3.0% in Sydney to 6.0% in Darwin. What’s good for you depends on whether you need income now or growth over time.
How to calculate rental yield
Gross yield = yearly rent ÷ price × 100. Net yield = (yearly rent − yearly costs) ÷ price × 100.
Example: a $700,000 property renting for $600 a week earns $31,200 a year, a gross yield of 4.5%. Take off $8,500 of yearly costs (management, insurance, rates, maintenance) and the net yield is 3.2%. Interest isn’t included in either; that’s a cash flow question.
Our rental yield calculator does both for you.
What counts as a good yield
| Gross yield | What it usually means |
|---|---|
| Under 3% | Low. Typical of expensive inner-city houses; you're relying on growth. |
| 3% to 4% | Average for houses in Sydney, Melbourne, Brisbane and Adelaide. |
| 4% to 5% | Solid for a capital city house; typical for many units and regional cities. |
| 5% to 6% | High for a house; common in Darwin, regional towns and some units. |
| Over 6% | Very high. Check why: small towns, mining areas and older units often yield this much. |
Typical yields in each capital
Cotality’s September 2026 figures put house yields between 3.0% and 6.0%. See the full table, with units, on rental yields by city.
When a high yield is a warning sign
- The town depends on one industry, such as a mine, and rents could fall if it slows.
- There are few buyers, so selling can take a long time.
- The building is old and maintenance or strata costs will eat the extra rent.
- Lots of new supply is coming, which can push vacancy up and rents down.
Yield vs growth
Higher-yield properties help cover the loan, which matters more now that rates are higher and, from 1 July 2027, losses on established property bought after 12 May 2026 can’t reduce tax on your salary. Higher-growth properties usually yield less but have built more equity over time. Our guide to growth vs yield strategy covers how to choose.
General information only, not personal financial advice.
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Book a free discovery callRental yield: common questions
What is a good rental yield in Australia?
As a rough guide, a gross yield of 4% or more is solid for a house in most capitals in 2026, and 5% or more for a unit. Regional areas often yield more. A yield well above the local average can be a warning sign rather than a bargain.
How do you calculate rental yield?
Gross yield is the yearly rent divided by the property's price, times 100. A $700,000 property renting for $600 a week earns $31,200 a year, a gross yield of about 4.5%. Net yield takes off yearly costs before dividing by the price.
Is 7% a good rental yield?
It's high for most capital city houses. You'll usually find yields like that in smaller regional towns, mining areas or older units, where growth can be slower and risks higher. Check vacancy, demand and the reason the yield is high.
Is a high yield or high growth better?
It depends on your goals and cash flow. High-yield properties help cover the loan and suit investors who need income. High-growth properties usually yield less but have built more wealth over the long run. Many investors aim for a balance.
General information only. It doesn’t consider your personal circumstances and isn’t financial, tax, credit or legal advice. Speak to a licensed professional before you act.