If you’ve followed A Practical Guide to Owning a Rental Property and The Definitive Guide to Rental Property Ownership, you already understand how to prepare, purchase and manage an investment.
This final instalment looks at where to find good rental properties in 2025, what defines a strong rental market, how different property types perform, and which states and towns currently lead the country for rental income.
Cotality’s Quarterly Rental Review (October 2025) shows national vacancy rates near record lows and gross yields holding steady. Rent growth continues across most capitals, pointing to a market driven by persistent demand, limited supply and renewed confidence in regional areas.
What defines a strong rental market
High-performing markets balance supply, affordability and employment diversity.
Three factors consistently underpin sustainable returns:
- Low vacancy rates - steady demand and fewer gaps between tenants.
- Balanced affordability - rents that sustain yield without pricing out tenants.
- Economic depth - locations supported by multiple industries rather than single-sector cycles.
In 2025 these fundamentals shape every state and territory, influencing yield, price growth and investor opportunity.
State-by-state performance
New South Wales
Tight supply and widening affordability gaps
Sydney remains Australia’s most expensive rental market. Houses in Vaucluse rent for around $2,148 a week, while units in Barangaroo reach $1,435. Yields in these blue-chip enclaves sit below 3%, appealing to investors focused on capital security rather than income.
More affordable suburbs such as Carramar, Cabramatta and Canley Vale tell a different story. Units here rent for $440–$480 a week, delivering 5–6% yields and sub-2% vacancy. Mid-ring precincts around Parramatta, Homebush and Ryde average 4%, balancing accessibility and price.
Beyond Sydney, Dubbo, Tamworth and Illawarra towns such as Berkeley and Koonawarra offer yields near 5% with tight vacancy.
NSW spans the full rental spectrum, prestige markets driven by growth and regional hubs defined by cash-flow stability.
Victoria
Diverging markets, consistent demand
Melbourne’s rental market held firm through 2025. Vacancy edged up to 1.4%, still well below the 3 % balance point. Rents continued to rise, though more moderately than in other capitals, signalling stabilisation rather than slowdown.
Bayside suburbs Brighton, Hampton and Sandringham remain the state’s priciest, with weekly rents between $1,170 and $1,370 and yields of 2–3%. In the west, Melton South, Werribee and Hoppers Crossing provide the bulk of affordable supply, with rents of $380–$470, yields around 5 % and vacancies often under 2%.
Family suburbs Craigieburn and Epping show similar strength, while Ballarat, Bendigo and Geelong continue to attract investors seeking solid regional returns and lower entry prices. Melbourne’s recovery is being shaped from the outside in, with the outer corridor and regional centres driving Victoria’s best rental income areas.
Queensland
Strong capital gains, softer yields
Brisbane’s reputation has shifted completely. Once a quiet achiever, it has transformed over the past four years through migration, infrastructure investment and the announcement of the 2032 Olympics.
Median dwelling values rose 8.8% in 2025, keeping Brisbane the second-most expensive capital after Sydney. Price growth has narrowed yields to 3.6%, aligning the city with southern capitals. Vacancy increased slightly from 1.7 to 2.1%, still well below balanced conditions.
Inner-ring favourites Bulimba, Brookfield and Hawthorne record rents near $1,100 with yields of 2.5–3%. Mid-ring suburbs Kenmore Hills, Graceville and Carindale average $950–$1,050 a week, while outer corridors such as Caboolture, Logan Central and Ipswich maintain yields around 4.5 % and sub-2% vacancy.
Regional Queensland adds diversity with Toowoomba, Bundaberg and Mackay posting yields between 5 and 6%, supported by population growth and healthy job markets. Brisbane’s rental story is one of adjustment, slower yields but steady demand.
South Australia
Affordability, stability and a steady return
Adelaide might be known for churches and wine weekends, yet its affordability during the pandemic sparked one of the nation’s strongest booms. Median dwelling values are up 6.2% to $855,998, and vacancy remains among the lowest in Australia.
Inner-suburb leaders Unley Park, Malvern and Norwood achieve rents of $800–$970 a week with yields around 3 to 3.8%. Northern areas Salisbury, Andrews Farm and Elizabeth South deliver 5 % yields with vacancies below 1.5%.
Regional centres Whyalla and Port Pirie still top the state for income return, offering 6 to 7% yields and affordable entry points. Adelaide’s calm, consistent growth keeps it one of Australia’s best states for rental income.
Western Australia
Boom times and bright skies but history still matters
People in Perth often say the west is best, and it’s lived up to its name in property terms in the past few years. The market has been running hot for three years, powered by tight housing supply, strong employment and steady returning expats.
Median dwelling values have risen 7.5% to $855,267, vacancy is near 1%, and yields average 4.8 %, higher than the east coast but tightening as prices rise.
Premium inner city suburbs Dalkeith, Cottesloe and Swanbourne command weekly rents above $1,400 with 2.5% yields, while affordable pockets Mandurah, Orelia and Rockingham return 5 to 6%. Regional hubs Geraldton, Bunbury and Kalgoorlie deliver 6 to 7%, underpinned by mining and logistics.
Still, locals know Perth moves in cycles. The last post-GFC downturn hit hard, and while mining wealth has buoyed confidence, long-term investors should plan for volatility. For now, the mix of growth, yield and sunshine keeps WA among the best states for rental income.
Tasmania
Small scale, strong (rental) results
With fewer than 600,000 residents and limited housing construction, supply in the Apple Isle remains tight with healthy dwelling yields of 4.4% and a vacancy rate of 1.2%, second lowest nationally.
It also helps its median dwelling value is down about 10% since its 2022 peak, which bodes well for investors looking for value.
In Hobart, Battery Point, Sandy Bay and Lenah Valley record yields of 3.5 to 4.4% with excellent tenant retention. Launceston and Devonport achieve 4.5 to 5%, while the northern coastal towns Ulverstone and Penguin attract steady regional migration.
Consistent demand and slow building activity keep Tasmania one of the country’s high rental income areas, proving small markets can deliver big stability.
Australian Capital Territory
Managed growth and consistency
Canberra’s market remains one of the nation’s most predictable. The ACT’s regulated rent increase framework keeps growth aligned with CPI, offering stability for owners and tenants alike.
Inner city precincts Kingston, Barton and Braddon record yields close to 4% with minimal vacancy. Apartments in Gungahlin and Belconnen achieve about 6%, while houses in Tuggeranong hover near 4%.
Steady employment and strong public sector demand keep Canberra a safe, consistent performer for investors seeking reliability over rapid gains.
Northern Territory
Smaller market, strong income
Darwin remains one of Australia’s best cities for rental yield as defence and resources industries continue to support population inflows and a tight rental pool.
Across the city and the suburb of Palmerston, houses and apartments typically yield 6 to 8% with vacancy below 2%. Suburbs such as Bakewell, Woodroffe and Durack show comparable results.
However, yields can fluctuate more than in the southern capitals, but for investors comfortable with short cycles, the Territory offers some of the nation’s highest rental returns.
Regional highlights and emerging markets
Opportunity beyond the capitals
Regional Australia continues to attract investors looking for high rental demand areas and steady income. Infrastructure investment and lifestyle migration are among the key drivers.
In Western Australia, Albany and Geraldton post yields above 6% with vacancy below 1%. In Queensland, Toowoomba and Mackay benefit from logistics and education projects, while the coastal stretch from Hervey Bay to Bundaberg draws affordability-driven movers from interstate.
South Australia’s Port Augusta and Whyalla are gaining from renewable energy investment, producing 6 to 7% yields. Dubbo and Tamworth in NSW deliver more than 4% with sub 1% vacancy, and Ballarat, Bendigo and Wodonga in Victoria hold steady near 5%.
Across Tasmania, Launceston and Devonport remain dependable high yield towns, with Penguin and Ulverstone emerging as entry level options.
These regions highlight a national shift as investors increasingly look beyond the capitals to find the best towns for rental income and stronger cash flow.
Houses and units
Two paths to rental return
Houses attract higher weekly rents but usually lower percentage yields due to higher purchase prices. They suit long term tenants and deliver steady occupancy.
Units provide higher yields and lower entry costs, particularly in inner city and coastal areas where proximity drives demand. In 2025, Cotality data shows unit yields sitting 0.5 to 1 percentage point above houses in most capitals.
Matching property type with investment goals, whether consistent income or future value growth, helps owners identify the best areas for rental yield within their budget.
The bigger picture
Australia’s rental market in 2025 remains undersupplied yet broadly stable. Perth and Darwin lead for yield, Brisbane and Adelaide balance income with growth, while Sydney and Melbourne provide long term capital strength. Regional centres from Ballarat to Launceston continue to show how smaller markets can deliver reliable returns.
Wherever you choose to invest, the principle is the same. Look for sustained demand, balanced affordability and transparent data to help you make an informed decision. Cotality’s market insights help investors compare yield, vacancy and value across every region, turning information into opportunity and guiding the next generation of Australian property owners.
Knowledge is power
If you’re considering expanding your portfolio, educating yourself on your first rental property or researching where to find rental properties for sale, Cotality’s insights hub has the latest data on rental yields and vacancy trends across Australia. It’s a valuable free resource for owners wanting to turn knowledge into strategy.
Important note
All statements reference current rental conditions, yield and vacancy data from Cotality’s October 2025 Quarterly Rental Review. Descriptions are factual and non-predictive. This content is general in nature and does not constitute financial or investment advice. Always seek independent professional guidance before making property decisions.
