Net Yield Explained: Real Investor Returns in NSW (Nov 2025)
Summary: Many investors know their gross yield, but real profits depend on what remains after expenses. This guide breaks down net yield—how to calculate it, where NSW stands in late 2025, and why it matters for long-term returns.
- Location: New South Wales (statewide)
- Period: November 2025
- Audience: Property investors (beginner to intermediate)
Key Stats — NSW Investment Snapshot
| Metric | Value | Source / Date |
|---|---|---|
| Median house rent | $720 pw | PropTrack, Oct 2025 |
| Median unit rent | $620 pw | CoreLogic, Oct 2025 |
| Average gross yield (house) | 3.5% | CoreLogic, Oct 2025 |
| Average net yield (after costs) | 2.4–2.8% | RDATA estimate, Nov 2025 |
| Vacancy rate (statewide) | 1.1% | SQM Research, Oct 2025 |
What Changed and Why
While gross yields across NSW appear to have risen slightly since mid-2024, net yields have stayed flat or dipped. Higher strata fees, insurance premiums, and repair costs have offset rental growth. In regional areas like the Hunter and Central Coast, yields remain more stable due to lower outgoings and entry prices.
How to Calculate Net Yield
Annual Rent – (Annual Expenses) ÷ Purchase Price × 100
Example:
($37,440 rent – $9,000 costs) ÷ $950,000 = 2.99% net yield
Investor Advice
- Track all holding costs — strata, insurance, council rates, and property management fees — before comparing yields.
- Use after-tax, after-interest calculations to estimate true cash flow potential.
- Compare suburbs on net yield per risk — higher yields often coincide with higher vacancy or maintenance risks.
- Model a 0.5% interest rate increase to stress-test affordability.
Risks & Caveats
Net yields vary sharply between metro and regional NSW. Older units may have escalating strata levies, while newer homes may face higher insurance costs. All calculations exclude capital growth assumptions and individual tax outcomes.
Sources
- PropTrack – “Rental Market Report” (Oct 2025)
- CoreLogic – “Monthly Market Trends” (Oct 2025)
- SQM Research – “Residential Vacancy Data” (31 Oct 2025)