Rents up, prices down: rental yields at their highest since 2019
The national gross rental yield rose to 3.85% in September 2026, the highest since August 2019. It is rising for two reasons at once: rents are up 5.5% over the year, and home values have fallen for six months. Yields range from 3.4% in Sydney to 6.5% in Darwin.
Gross rental yield is the yearly rent divided by the value of the property. It moves when either side moves. Right now both are moving in the direction that lifts it.
That sounds like good news for investors, and partly it is. But a yield number on its own tells you nothing about whether a property pays for itself. For that you have to set it beside the interest rate.
Key facts, as at 30 September 2026
- National gross rental yield: 3.85%, highest since August 2019
- National rents: up 0.3% in the month, up 5.5% over the year
- National vacancy rate: 2.0%, up from a record low of 1.5% in February
- Tightest capital: Adelaide, 1.4% vacancy. Loosest: Hobart, 3.0%
- Weekly rents are up about $200 over five years
Source: Cotality Home Value Index, 1 October 2026
Yield by capital city
| Gross yield | |
|---|---|
| Darwin | 6.5% |
| Hobart | 4.4% |
| Canberra | 4.4% |
| Melbourne | 4.1% |
| Perth | 4% |
| Adelaide | 3.6% |
| Brisbane | 3.5% |
| Sydney | 3.4% |
Source: Cotality Home Value Index, results to 30 September 2026
| City | Gross yield | Median value | Rent that implies, per week |
|---|---|---|---|
| Sydney | 3.4% | $1,198,596 | about $784 |
| Melbourne | 4.1% | $780,550 | about $615 |
| Brisbane | 3.5% | $1,048,880 | about $706 |
| Adelaide | 3.6% | $928,560 | about $643 |
| Perth | 4.0% | $975,022 | about $750 |
| Hobart | 4.4% | $741,496 | about $627 |
| Darwin | 6.5% | $633,431 | about $792 |
| Canberra | 4.4% | $861,744 | about $729 |
| National | 3.85% | $899,236 | about $666 |
The last column is our own arithmetic: the yield times the median value, divided by 52. It is not a quoted median rent. It is there to make the percentages feel real.
Melbourne is the surprise. Years of weak prices have left it with a better yield than Sydney, Brisbane or Adelaide, on a much lower entry price.
Units yield more than houses everywhere. Nationally, units return 4.7% gross and houses 3.6%.
Why the vacancy rate is rising anyway
You might expect a tight rental market to keep tightening as investors leave. It has not. The national vacancy rate has moved up from 1.5% in February to 2.0%.
Cotality's Tim Lawless thinks renters are simply out of room to pay. "Weekly rents have risen by about $200 over the past five years across the country," he said. "This has been a period of unprecedented rental growth that has stretched rental affordability to the worst levels on record."
People respond by sharing. More adults per household means fewer households, and fewer homes needed. A 2.0% vacancy rate is still tight: the average for the decade before the pandemic was 3.3%.
The number yield has to beat
Here is the part that matters for a buyer.
The Reserve Bank reports that the average rate on new investor loans was 6.41% in July, before September's rise. Borrow 80% of the price and your interest alone is about 5.1% of the property's value each year.
Against that, the national gross yield is 3.85%, and gross means before rates, insurance, management, repairs and strata.
Cotality says it without softening: "even with yields rising, opportunities for neutral to positive cash flow remain low, given the high holding costs including interest rates but also insurances, maintenance and strata fees."
So higher yields narrow the gap. They do not close it.
How we would use this
Compare yield with your own interest rate, not with last year's yield. The question is how much you must add from your pocket each week.
Be careful with the highest numbers. Darwin's 6.5% is real. Ask why it is that high before you chase it. A high yield can be the market pricing in risk.
From July 2027 the shortfall hurts more. If you buy an established home now, the loss stops reducing your tax from that date. See negative gearing is now law. A worked year is in a worked year of investment property cash flow.
Our 2025 guide to how rental yield is calculated explains the method, and is still up as it was written.
Open the Rentvesting Calculator
Frequently asked questions
What is the average rental yield in Australia in 2026?
The national gross rental yield was 3.85% in September 2026, the highest since August 2019, according to Cotality. Across the capitals it ranges from 3.4% in Sydney to 6.5% in Darwin.
Which capital city has the highest rental yield?
Darwin at 6.5%. Hobart and Canberra follow at 4.4%, then Melbourne at 4.1% and Perth at 4.0%. Sydney is lowest at 3.4%.
Are rents still rising in Australia?
Yes, but more slowly. National rents rose 0.3% in September, the smallest monthly rise since May 2025, and are up 5.5% over the year.
Is a 4% rental yield enough to cover the mortgage?
Not at today's rates. The average rate on a new investor loan was 6.41% in July 2026. A 4% gross yield, before any costs, falls well short of the interest on an 80% loan.
Sources
- Cotality, Australian housing values down for sixth straight month in September, Home Value Index, 1 October 2026
- Reserve Bank of Australia, lenders' interest rates, July 2026
Implied weekly rents are our own arithmetic. This is general information, not financial advice.