IF you’re thinking of diving into the property investment market, Sydney and Canberra
offer the best rental yields, according to RP Data.
Rental yields are the returns that property investors make on
their investment in percentage terms. It’s calculated by dividing the annual
rental income by the purchase price of the property. So for example, if a
landlord is getting $400 a week for a property which was bought for $450,000,
the yield would be 4.6 per cent.
Yields fell last year as house prices rose quicker than rental rates. But as
house price growth slows and the tight rental market leads to higher rents,
yields are starting to pick up.
“With capital growth now softening nationally, rental increases are once
again outpacing the house and unit price growth, leading to stronger rental
yields,” said RP Data’s national research director Tim Lawless.
RP Data looked at top performing suburbs within 10km of capital cities
around the country. The highest gross rental yield in the country is for units
in Darlington, Sydney,
which has an average gross rental yield of 8.6 per cent.
Mr Lawless said both Sydney and Canberra have at least
five suburbs with a gross rental yield of more than 6 per cent.
“Sydney and Canberra have the highest and second highest
median house values of any capital city, which acts as another driver for the
rental market,” he said.
“Sydney has exceptionally strong demand
fuelled by a large rental market situated close to Australia’s
largest employment node, while Canberra
has the significant presence of public service.”
He said high property prices were pushing more potential buyers
into the rental market.
The Figures provided for Sydney
in the article were:
City Suburb
Median price Weekly median Gross rental
$
rent
$ yield
%
Sydney Darlington 228,000
375
8.6
The
Rocks 670,000 1100
8.5
Haberfield 275,000 375
7.1
Haymarket 498,000 650
6.8
Greenwich 335,000
425
6.6
Source: RP Data
Source:
www.news.com.au/business/money/story/0,25479,24004011-5013951,00.html