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A recent article by loans.com.au showed the suburbs with the highest rental yield in Australia based on data from Cotality's Best of the Best 2025 property report. Below are the key findings for top suburbs for property investment in capital cities and regional areas:
Top 10 suburbs for property investment in capital cities
|
Suburb |
Area |
Property Type |
Rental Yield |
Median Rental Value |
|
Gray |
Greater Darwin |
Unit |
8.6% |
$555 |
|
Carlton |
Greater Melbourne |
Unit |
8.6% |
$566 |
|
Driver |
Greater Darwin |
Unit |
8.3% |
$566 |
|
Parap |
Greater Darwin |
Unit |
8.0% |
$618 |
|
Millner |
Greater Darwin |
Unit |
7.9% |
$540 |
|
Darwin City |
Greater Darwin |
Unit |
7.9% |
$693 |
|
Rosebery |
Greater Darwin |
Unit |
7.8% |
$595 |
|
Bakewell |
Greater Darwin |
Unit |
7.8% |
$562 |
|
Coconut Grove |
Greater Darwin |
Unit |
7.5% |
$528 |
|
Woolner |
Greater Darwin |
Unit |
7.5% |
$692 |
Source: Cotality Best of the Best Report 2025
In Australia’s capital cities, most of the highest rental yield suburbs are in Greater Darwin, with Carlton in Greater Melbourne being the only exception. This may be due to a combination of relatively lower property prices in Darwin and strong rental demand compared to larger metro areas such as Sydney, Melbourne, and Brisbane.
It’s also interesting to note that units account for the highest rental yield percentages in these suburbs. It could be because units are the more accessible option to renters, which in turn makes them have a higher rental yield.
See also: How rental yield works
However, there are plenty of other factors to consider, such as demographics, rental demand and supply and conditions, and the like.
Top 10 suburbs for property investment in regional areas
|
Suburb |
Region |
Property type |
Rental Yield |
Median Rental Value |
|
South Hedland |
Rest of WA |
Unit |
17.8% |
$876 |
|
Newman |
Rest of WA |
Unit |
14.3% |
$671 |
|
Pegs Creek |
Rest of WA |
Unit |
13.2% |
$1,160 |
|
Newman |
Rest of WA |
House |
12.6% |
$826 |
|
Cable Beach |
Rest of WA |
Unit |
12.5% |
$905 |
|
Kambalda East |
Rest of WA |
House |
12.2% |
$406 |
|
Broome |
Rest of WA |
Unit |
11.8% |
$900 |
|
South Hedland |
Rest of WA |
House |
11.3% |
$1,065 |
|
Kambalda West |
Rest of WA |
House |
10.8% |
$439 |
|
Pegs Creek |
Rest of WA |
House |
10.8% |
$1,241 |
|
Millars Well |
Rest of WA |
House |
10.8% |
$1,305 |
Source: Cotality Best of the Best Report 2025
Western Australia dominates the list of top-performing suburbs in regional Australia. The rental yield percentages in regional areas are considerably higher compared to capital cities. There’s also a mix of property types, which could give investors more options for their property investment.
Take note, there’s a significant difference in median rental value among the highest rental yield suburbs in regional areas. This could be due to the suburb's exact location; if it’s in a more rural area, it may have lower property values than those closer to metropolitan areas. The property type may also play a role in median rental value.
Factors to consider when investing in property
When investing in property, there are more factors to consider beyond potential rental yield alone. Before you start shopping around, keep the following in mind to help guide your next investment property purchase:
-
Budget – Review your finances carefully to understand what type of property is within your price range.
-
Investment property home loan – It’s important to choose an investment home loan that fits your financial situation and overall investment strategy.
-
Maintenance costs and tax – Always include the cost of upkeep, council rates, and other tax obligations in your budget.
-
Investment strategy – Deciding on an investment strategy early on can help you determine what type of property can help you achieve your goals.
Final thoughts
When talking about rental yields, the general rule of thumb is that a return between 4% and 6% in considered good, while anything beyond may be regarded as above average. However, there is no definitive ‘good’ or ‘bad’ rental yield. It all depends on how an investment property aligns with your investment goals.
See also: What is rental yield and how do you calculate it?
Looking at rental yields may give you an idea of what to expect in certain suburbs, but there’s more to property investment than rental yield percentages. It’s best to look at your investment strategy holistically and consider other factors. You could also consult with an investment finance professional for more guidance.
Ready to start your investment property journey? Get in touch with loans.com.au today! Our friendly lending specialists are more than happy to chat with you about your finance needs. Or check out our range of competitive rate investment loans.
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