Australia’s high rental yield hotspots revealed as investors tread budget fallout

Many investors are reassessing their strategy in the wake of the federal budget, with proposed tax changes to negative gearing and the capital gains tax discount prompting some to consider higher-yielding assets.

As landlords calculate their next steps following the budget’s housing tax fallout, New PropTrack analysis has revealed where property investors can find Australia's highest rental yields across the country.

The data shows most of the top-yielding regions are scattered throughout regional Western Australia and Queensland - especially those in mining hotspots - though strong yields do still exist in some capital cities.

Gross rental yields measure how much rent a property earns in a year as a percentage of the property value, with higher yields indicating better income returns. The figures don't factor in outgoings such as maintenance fees or holding costs.

Both houses and units were able to generate stellar returns for property investors in Australia’s top 10 locations, all recording rental yields above 10%.  

Australia's highest rental yields 

Jump ahead to see the highest yielding capital city suburbs.

The budget changes will prompt some property investors to look at higher-yielding rental properties more than they might have before, due largely to proposed changes to the capital gains tax discount and the scrapping of negative gearing.

PropTrack senior economist Angus Moore said the highest rental yields were seen in regional areas. 

“Regional areas, on average, carry higher rental yields than capital cities,” he said.  

“They tend to be more affordable and so mechanically that makes the gross rental yield higher, though that doesn’t explain necessarily the yield because you might expect the rent to be lower as well. 

“The other part of the story is that regional rental markets tend to be a bit thinner, with not as many renters and rentals, and they historically carry risks of being vacant for longer periods, so the yield compensates for that.  

“But that’s been less of a risk in the past few years given how tight regional markets have been.”  

The four-bedroom house at 21/4 Newman Drive, Newman sold for $490,000 this month. Picture: realestate.com.au/sold

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Mr Moore said mining was another factor seen among the rental yield hotspots.  

“Many of these areas like Port Hedland are mining areas, and those are obviously unique markets,” he said.  

He said mining areas were often relatively small and remote locations where the property market could swing in line with how the mining economy was performing. 

Units in Newman, a mining town in regional WA, recorded the highest rental yield out of all property types and locations in Australia, collecting 13% for the year to April 2026. 

The median unit price in Newman was $210,000, while the median weekly rent was $615, offering investors strong yield returns.  

Highest rental yields among the capital cities

Real estate agent Doug Shaw of Newman First National said the mining town was established by mining giant BHP.  

“BHP has its Whaleback mine here, which I believe is the biggest open-cut mine in the world,” Mr Shaw said.  

“We’ve got a couple of other mines being constructed within 50 kilometres of the town, and for perspective, the next biggest town is Port Hedland which is nearly 500km away, so any spin off from those mines will come through to us.”  

Mr Shaw said major miner Rio Tinto was investing heavily into its nearby Rhodes Ridge project, while competitor Fortescue was building a mine in the region too.  

The two-bedroom unit at 51/23 Sharpe Avenue, Pegs Creek sold for $755,000 last month. Picture: realestate.com.au/sold

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It comes as investors accounted for as much as 90% of the property sales in the town, he noted.  

“We’ve been pretty much flat strap for rentals and sales here, but it traditionally does quiet down this time of year, which it is doing,” he said.  

“I would normally have 12 to 15 properties for sale, and I think I have four or five, so the stock is down.” 

The other locations offering high unit rental yields were Pegs Creek (12.9%), Port Hedland (12.3%), South Hedland (11.2%), and Bulgarra (11.2%).  

Houses in Coolgardie and Kambalda East offered investors among the highest rental yields nationally at 11.5% and 11%, respectively.  

The only place outside of regional WA on the top 10 list was the Queensland mining town of Moranbah, where units generated a rental yield of 10.7%.  

The path forward for property investors remains unclear in the federal budget aftermath and the higher interest rate environment. 

“It’s still early days and we don’t have any hard data on investor activity post budget given that the changes haven’t even been legislated yet, so it’s still being digested by everyone,” Mr Moore said.  

“The combined effect of the changes to CGT and negative gearing will be to boost homeownership a little bit over the longer term, or to it put another way, we'll see a little bit less investor participation than we have historically.  

“It's hard to get a sense of how big that effect is going to be in part because we just haven't seen changes to these policies in nearly three decades.” 

The federal government estimates that the CGT and negative gearing changes will help an additional 75,000 first-home buyers get into the property market over the decade.  

Australia’s property industry has warned the budget changes will hurt rental supply, and consequently increase rents.