Perth suburbs with the highest rental yields in FY23

With Perth achieving record-breaking rent gains during the latest financial year, which suburb reaped substantial rewards for their property owners?

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Real Estate Institute of Western Australia (REIWA) chief executive Cath Hart noted the 2022-23 financial year was one marked with “milestones”, with new records set for the time to sell a property, the rental vacancy rate and rent prices.

She highlighted the state’s capital was recently named by CoreLogic as “one of the best investment opportunities around the country”, due to its strong rental yields, affordability and strong prospects for capital growth.

“Demand has continued to be high, and coupled with low supply, has seen rent prices hit a new record for WA over the past 12 months,” Ms Hart said.

Rent prices ended the financial year on an all-time high, with the median rent for the month of June rising to $580 per week for houses and $530 per week for units.

During the month, vacancy rates in the city also hit a new record, with the rental vacancy rate hitting a 42-year low of 0.6 per cent in December and has been 0.7 per cent for nine of the past 12 months.

Throughout the financial year, Medina, Armadale and Brookdale emerged as the top suburbs in the city with the highest rental yield for houses, all boasting a 6.3 per cent rental return. Medina and Armadale’s weekly rental price both stood at $400, while Brookdale’s weekly rate stood at $450.

Closely following were Orelia, Gosnells ($450 per week), Mandurah ($420 per week), Camillo ($420 per week) and Greenfields (460 per week), which recorded a rental yield of 6.1 per cent for houses.

Rounding out the list were Parmelia ($440 per week) and Cannington ($500 per week), both offering attractive rental yields of 6.1 per cent and 6 per cent, respectively.

And while houses outperformed units in terms of median sale price growth, units came to the fore for rental yield.

Data showed the Perth house market performed better than the unit market, with the median house price rising 4.6 per cent to a new high of $555,000 over the financial year. Meanwhile, median unit price in Perth fell 3.2 per cent to $399,000.

“The top 10 suburbs for units all recorded yields above the number one suburb for houses,” Ms Hart said.

She noted that the trend is likely due to the slower growth in sale prices of the unit market compared to houses, especially in a rental market that is experiencing an upward trend.

“Perth does offer good opportunities for investors with every suburb in both top 10 lists were very affordable,” she added.

Across the unit market, Bayswater was a standout performer for yield with a median weekly rent price of $450, leading to a yield of 9.6 per cent.

The suburbs of Balga and Glendalough clocked in second place for unit rental yields, with both recording an impressive rental yield of 8 per cent. Balga had a weekly rental price of $460, while Glendaloughs weekly price was $398.

Closely following were Rockingham (7.5 per cent) and Gosnells (7.4 per cent) with weekly prices of $440 and $385, respectively.

Other suburbs in the top 10 list for rental yields of units were Armadale (7.4 per cent at $390 per week), Shoalwater (7.3 per cent at $330 per week), Wembley (7.3 per cent at $400 per week), Midland (7.3 per cent at $400 per week) and Belmont (7.2 per cent at 480 per week).

In terms of annual rental growth, the 10 suburbs for rent price growth of houses were Shelley (38.5 per cent), Floreat (29.7 per cent), West Perth (28.3 per cent), Singleton (27.9 per cent), Orelia (26.8 per cent), Eglinton (26.4 per cent), Joondanna (26.3 per cent), Osborne Park (25.8 per cent), East Perth (24.5 per cent) and Caversham (24 per cent).

Meanwhile, Jolimont led the pack for top suburbs of unit rent price growth, recording a whopping 41.4 per cent annual change in rent over the 12-month period to June.

Other suburbs that recorded the biggest unit rent price growth were Rockingham (25.7 per cent), Ellenbrook (23.5 per cent) North Fremantle (23.0 per cent), West Perth (22.2 per cent), Victoria Park (22.2 per cent), East Fremantle (22.2 per cent), Inglewood (21.7 per cent), Tuart Hill (21.6 per cent ) and Dianella (21.6 per cent).

Notably, all suburbs in the top 10 list for both units and houses recorded a median leasing period of 20 days or less.

Ms Hart acknowledged alongside strong demand, the rental boom has been fueled by investment activity that continues to fall below expectations”.

“Given ongoing stock shortages and sustained demand from new interstate and overseas arrivals, we expect these trends to continue into the first half of the 2023-24 financial year,” she stated.

On the upside, the executive cited reports from real estate agents, builders and developers indicate increasing interest from eastern states investors, leading to expectations of a moderate increase in supply and a decline in the vacancy rate in the medium term.

Ms Hart stated Perth’s relatively affordable housing and strong rental yields have been key factors in attracting eastern states investor interest.

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