What Rental Yield Are You Getting On Your Properties Right Now?
Over the last year rental yields have still been increasing. Where house prices have gone down in many places rental yields have still climbed and according to RP Data these are the annual change in weekly rentals overall:
- Sydney 13.3%
- Melbourne 11.5%
- Brisbane 5.3%
- Adelaide 4.9%
- Perth 13.7%
- Darwin 34.8%
- Canberra 5.5%
- Australia 10.8%
As can be seen, Darwin has had a high increase in rental yield and this is mostly due to the lack of available rentals in that area.
Of the larger cities, Brisbane and Perth are still well below the average increase of 10.8%. The lower rental increases show where there is not the same demand on the housing rentals as there are in other areas such as Sydney, Melbourne and Perth.
Theoretically higher yields should mean two things: firstly that your return on investment would be good, and; secondly that property prices should climb due to demand.
Consideration also needs to be given to the fact that interest rates have gone down substantially in the last year and consequently mortgage repayments too.
What has been found is that investors are still holding back and this could drive these prices even higher. It is unlikely that even when investors do start buying again that there will be a ‘rush’ on the market, so it is reasonable to assume that purchasing in the higher rental return areas is still a good investment.
There are areas though, such as the Sunshine Coast in Qld, where renters are not lining up like they used to and rental properties are staying vacant longer than they have in the past.
So if you are purchasing, ask around and find out how long properties in the area you are intending to purchase are staying vacant in between lettings.
Filed Under: Investment Strategies • Property Investment • Property News
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