Best Rental Yield Suburbs in Australia 2026: State-by-State Guide

Rental yield is one of the most important metrics for property investors, particularly those focused on cash flow. A high rental yield means your property generates strong rental income relative to its purchase price, reducing your out-of-pocket holding costs and potentially delivering positive cash flow from day one. This guide explains how rental yield works, identifies the highest-yielding suburbs across Australia in 2026, and discusses the trade-offs investors need to understand.

How Rental Yield Is Calculated

Rental yield measures the annual rental income as a percentage of the property's value. There are two types:

• Gross rental yield: (Annual Rent / Property Value) x 100. This is the headline figure most commonly quoted. For example, a $400,000 property renting for $450 per week ($23,400 per year) has a gross yield of 5.85%.
• Net rental yield: ((Annual Rent - Annual Expenses) / Property Value) x 100. Net yield accounts for costs such as council rates, insurance, property management fees (typically 7-10% of rent), maintenance, water charges, strata levies (for units), and vacancy periods. Net yield is typically 1.5-2.5% lower than gross yield.

When comparing suburbs or properties, always ensure you are comparing like with like — either all gross yields or all net yields. The gross figures are useful for quick comparisons, but net yield is what actually determines your cash flow position.

High-Yield Suburbs by State

The following suburbs and towns represent some of the strongest rental yield opportunities across Australia in early 2026. These figures are based on median house prices and median weekly rents from publicly available data.

Queensland

Queensland dominates the high-yield landscape, with regional towns offering exceptional returns driven by affordable prices and strong rental demand from the resources, defence, and healthcare sectors.

• Moranbah: Gross yield 8-10%. A resources town in the Bowen Basin with median house prices around $300,000-$350,000 and rents of $600-$700 per week. High yields reflect mining sector dependence — a significant risk factor.
• Townsville (suburbs like Aitkenvale, Kirwan): Gross yield 6-7%. Median house prices around $350,000-$400,000. Diversified economy anchored by defence (Lavarack Barracks), James Cook University, and healthcare.
• Rockhampton (suburbs like Berserker, Park Avenue): Gross yield 6-7%. Affordable entry at $280,000-$350,000 with strong rental demand from resources and agriculture sectors.
• Gladstone: Gross yield 7-8%. Benefiting from the LNG industry and infrastructure investment. Median house prices around $320,000-$380,000.
• Bundaberg: Gross yield 5.5-6.5%. Growing regional centre with median house prices around $380,000-$430,000 and improving infrastructure.

South Australia

Adelaide's outer suburbs and regional South Australia offer strong yields at accessible price points, underpinned by defence industry growth and a diversifying economy.

• Elizabeth/Elizabeth North: Gross yield 6-7%. Median house prices around $350,000-$400,000. Proximity to the Osborne naval shipyard and Edinburgh defence precinct drives rental demand.
• Davoren Park: Gross yield 6-7%. One of Adelaide's most affordable suburbs with entry prices from $300,000-$350,000.
• Murray Bridge: Gross yield 5.5-6.5%. Regional town approximately 75km from Adelaide with a diversified economy. Median house prices around $350,000-$400,000.

Western Australia

Perth's severe rental shortage (vacancy rates below 0.5% in many suburbs) has pushed rents sharply higher while prices, despite recent growth, remain relatively affordable.

• Armadale: Gross yield 5.5-6.5%. South-eastern Perth corridor with median house prices around $420,000-$480,000 and strong rental demand.
• Kalgoorlie: Gross yield 7-9%. Mining town with volatile but high yields. Median house prices around $300,000-$380,000.
• Mandurah: Gross yield 5-6%. Coastal city south of Perth with growing population and affordable entry at $430,000-$500,000.

New South Wales

Yields in Sydney are compressed (typically 2.5-3.5% for houses), so investors seeking yield need to look to regional NSW.

• Broken Hill: Gross yield 7-9%. Very affordable ($150,000-$250,000) but carries significant risk due to small population and mining dependence.
• Dubbo: Gross yield 5-6%. Strong regional centre with diversified economy (health, education, agriculture). Median house prices around $420,000-$480,000.
• Tamworth: Gross yield 5-5.5%. Regional hub with stable rental demand and median house prices around $430,000-$490,000.

Tasmania

• Burnie/Somerset: Gross yield 5.5-6.5%. North-west coast town with affordable entry ($300,000-$380,000) and steady rental demand.
• Devonport: Gross yield 5-6%. Growing regional centre with improving infrastructure and entry prices around $350,000-$420,000.

Yield vs Growth: The Trade-Off

There is a well-documented inverse relationship between rental yield and capital growth in Australian property. Suburbs with the highest yields tend to deliver lower capital growth, and vice versa. This is because:

• High-yield areas have lower prices: Property is cheaper relative to rents, which mathematically produces higher yields. But prices are lower for a reason — typically weaker demand, economic risk, or less desirable locations.
• High-growth areas have compressed yields: Strong buyer demand pushes prices up faster than rents can follow, compressing yields. A Sydney beachside suburb may yield 2.5% but deliver 7% annual capital growth.

The best investment outcomes often come from suburbs that offer a reasonable yield (4.5-5.5%) combined with solid growth fundamentals — what some analysts call the "Goldilocks zone." For suburb picks that balance yield and growth, see our guide to the best suburbs to invest in for 2026.

What Drives High Rental Yields

Understanding why yields are high in a given area helps you assess whether the yield is sustainable or a warning sign:

• Genuine rental shortage: Low vacancy and limited housing supply relative to demand. This is the healthiest driver of high yields and typically correlates with population growth and economic activity.
• Low property prices: If prices are depressed due to historical economic issues, yields appear high mathematically. But if the underlying issues persist, prices may continue to stagnate or fall, eroding total returns.
• Transient workforce: Mining towns and resource regions often have high rents due to FIFO (fly-in, fly-out) workers and limited accommodation. Yields can be exceptional during a boom but collapse during a downturn.
• Student and defence housing: Suburbs near universities or military bases often have steady, predictable rental demand that supports yields.

Risks of Yield-Chasing

Buying solely based on yield can lead to poor investment outcomes. Key risks include:

• Capital stagnation: A property yielding 8% but growing at 0% per year over a decade will deliver worse total returns than a property yielding 3.5% but growing at 6% per year.
• Economic fragility: Many high-yield towns depend on a single industry. When that industry suffers, tenants leave, vacancy spikes, rents collapse, and property values plummet.
• Low liquidity: Properties in small towns can be difficult to sell when you need to. Limited buyer pools mean longer selling times and potentially accepting below-market offers.
• Maintenance intensity: Older, cheaper properties often require more maintenance, and tenant quality can be more variable in lower-priced markets, further reducing net yields.

Tips for Finding High-Yield Suburbs

1. Start with vacancy rates: A vacancy rate below 2% is the strongest indicator of sustainable rental demand. Avoid areas above 3% unless you have strong evidence of improving conditions.
2. Check economic diversity: The best yield suburbs have multiple employment drivers (healthcare, education, government, resources) rather than depending on one employer or industry.
3. Look at population trends: Growing populations need more housing. Declining populations are a red flag, regardless of current yield.
4. Calculate net yield, not just gross: Factor in all expenses — council rates, insurance, management fees, maintenance, vacancy allowance, and strata (for units) — to understand your true cash flow position.
5. Research the rental market: Use Realestate Lens's property research tools to analyse rental demand, vacancy rates, and rent growth trends in your target suburbs.
6. Consider tax implications: High-yield properties that generate positive cash flow are fully taxable at your marginal tax rate. Negatively geared properties offset losses against your income. Understand the tax implications of negative gearing before deciding on a yield-focused strategy.

Key Takeaway

For a comprehensive approach to building a property investment portfolio, see our property investing guide.

Note: Yield figures in this article are based on publicly available median price and rental data as of early 2026 and are indicative only. Actual yields vary by individual property. This is general information, not personal financial advice. Always conduct your own research and consider seeking advice from a qualified financial adviser.