Investors should look to Queensland before the rest of the country, according to a new list of high-yielding and still growing suburbs.
A list of 56 suburbs across Australia where the average rental yield surpasses five per cent and the capital growth predictions are at least three per cent for the next eight years has been revealed by Onthehouse.com.au.
Queensland suburbs make up 41 per cent of the list with 23 suburbs appearing.
Western Australia is next with 13 suburbs on the list, NSW has 10, South Australia and the Northern Territory each have three, the ACT has two, and VIC and TAS come in last with just one each.
The top Queensland suburb was Roma, with a median house value of $303,500 returning an average 6.59 per cent rental yield with a predicted nine per cent growth per annum for the next eight years.
The next top ranking Queensland suburbs were Logan Reserve, Tanah Merah, Morayfield, Curra and Bonogin.
Affordability is a main contributor to high rental yield rates, with 75 per cent of the suburbs on the list having median values below the national median of $491,000 for houses and $452,500 for units.
The median house value in Brisbane sits just below the national median at $484,500, while in Sydney the median house value is almost double that at $961,000.
While the Sydney housing boom has provided huge capital growth, the increase in real value has failed to keep up and so rental yields have dropped.
The median house in Sydney has an estimated rental yield of just 3.62 per cent in May 2015 after a steady decline since the housing boom began in 2012.