Both Sydney and Melbourne rental yields continue stabilising

Across the capital city gross rental yields there has been both compression and growth, according to the latest SQM Research data.

They found that while yields in the Sydney and Melbourne have both stabilised following recent falls, Melbourne has recorded a rise while Sydney has had some yield compression since 2016.

Hobart Adelaide and Perth joined Melbourne as they all saw a rise in rental yields over the past four years.

Compared to them it's only Canberra and Sydney that saw compression.

SQM research said, "if you consider that the average variable home lending rate is just under 5% before discounts and falling, a number of these capital cities potentially could be offering cash-flow positive property."

"Canberra Darwin, Adelaide, Hobart and even Brisbane would be close to offering cash-flow positive investments after tax."
 
"Always remember though, yields are meant to fairly reflect risk. The higher the yield, the higher the risk. But as is often the case in property, a fair yield for risk doesn’t always occur," they concluded.