Summary: Understanding gross rental yield helps investors compare potential returns across suburbs and property types. Here’s how to calculate it and what an “ideal” yield looks like in the Australian market.
What is gross yield?
Gross yield measures annual rental income as a percentage of the property’s value. It ignores costs like maintenance or vacancies, making it a quick comparison metric.
Gross Yield (%) = (Annual Rent ÷ Property Value) × 100Example
If a $600,000 apartment rents for $650 per week, the annual rent is $33,800.
Gross yield = (33,800 ÷ 600,000) × 100 = 5.63%
Typical yields (2025)
- Houses (Sydney metro): 3.3–3.8%
- Units (Sydney metro): 4.5–5.2%
- Regional NSW: often 5–6%+
How to use it
- Compare suburbs quickly before deeper due diligence.
- Track yield changes over time — falling yields often mean prices are rising faster than rents.
- Balance yield vs. capital growth expectations.
Sources
- CoreLogic Investor Data (2025)
- Domain Rental Yields Report, Q3 2025
Slug: gross-yield-101 — Category: Investment