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Best Rental Yields in Australia 2025 so far.
If you’re a property investor wondering where to invest next, rental yields are a great place to start. They don’t just reveal how much rental income you can earn—they also reflect what’s happening in the local market. Are tenants competing for homes? Are rental returns keeping pace with rising property values?
What Is Rental Yield?
Rental yield is the percentage return you earn from a property’s rental income, based on its value. It’s calculated by dividing the annual rent by the property’s purchase price or market value, then multiplying by 100. Investors use it to compare potential returns across different suburbs or property types.
Why Are Rental Yields So High in 2025?
Back in 2021, we highlighted how rental yields and vacancy rates go hand in hand. When vacancy rates are low, demand is high—and yields tend to rise.
Fast forward to 2025, and we’re seeing this play out across much of Australia. The key drivers behind rising rental yields are:
- Record-low vacancy rates in capital cities and regional centres
- Strong migration, putting pressure on housing demand
- High construction costs, slowing new housing supply
With fewer homes available and more renters competing for them, rental prices have surged—especially in areas where property values have remained relatively stable. That imbalance pushes rental yields higher.
One example is the Sunshine Coast. A few years ago, vacancy rates there dropped from 2.4% to below 0.6%, sending rental yields to record highs. In 2025, we’re seeing similar trends unfold nationwide.
Top Rental Yield Suburbs in Australia (2025)
Here are some of the best-performing suburbs for gross rental yield this year:
New South Wales
- Dubbo – ~5% yield for houses
- Liverpool (Sydney) – ~5.7% yield for units
Victoria
- Mildura – ~5.6% yield for houses
- Footscray (Melbourne) – ~5.9% yield for units
Queensland
- Collinsville – ~9.0% yield for houses
- Cairns North – ~7.4% yield for units
Western Australia
- South Hedland – Over 10% yield
- Armadale (Perth) – ~6% yield
South Australia
- Elizabeth North – ~5% yield for houses
- Salisbury – ~5% yield for units
Tasmania
- Glenorchy (Hobart) – ~5.1% yield for units
- Launceston – ~5% overall
Northern Territory
- Woodroffe (Palmerston) – ~6% yield for houses
- Darwin CBD – 7.5%+ yield for units
Australian Capital Territory (ACT)
- Belconnen – ~6.1% yield for units
- Greenway – ~5% yield
What Do These Rental Yield Numbers Mean for Investors?
When you see low vacancy rates and strong yields together, it often means a suburb has more demand than supply—a positive sign for investors. Areas with vacancy rates under 3% typically experience rental pressure, giving landlords both steady income and room for rent increases.
But remember: the highest yield isn’t always the best investment. Some suburbs with extreme yields—like mining towns—can be volatile or risky. Look for a balance between strong rental income, stable tenant demand, and long-term capital growth potential.
Final Thoughts: Where the Opportunity Lies in 2025
Australia’s housing shortage is still a major issue in 2025. With tenants struggling to secure homes, rental yields are climbing across the country. The best opportunities lie in suburbs that combine:
- Low vacancy rates
- Consistent rental demand
- Strong infrastructure and lifestyle appeal
- Reasonable property prices
If you can find a location that ticks all those boxes, you’re setting yourself up for both short-term income and long-term capital growth.
Need Help Finding High-Yield Suburbs?
Whether you’re looking to crunch the numbers or compare suburbs, we’re here to help you make confident, data-driven investment decisions.
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