What are the Sydney suburbs with the highest residential rental yields: HTW
Rental yields in Sydney have been on the decline over the past decade, as rents have failed to keep pace with increasing property prices, according to the latest Herron Todd White (HTW) residential report.
The valuation firm took a look at yields across the country and dissect where to find the best returns in residential markets.
According to SQM research, average yields for houses in Sydney fell from 3.7% in August 2009 to 2.8% in August 2019, while units fell from 4.9% to 3.7% over the same period.
The HTW report notes while prices were rising, investors were happy for the capital growth to offset the declining rental yields.
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Source: data from SQM Research
"Unfortunately as prices began to fall over the past two years, rental yields did not climb as expected, as increasing rental vacancies put downward pressure on asking rents," the valuation firm said.
"Obviously Sydney is a large city and rental yields will differ across its many regions.
"So which regions are currently providing the best average yields? For houses, the Lower North Shore has the highest average yield at 3.5%, while south-western Sydney and western Sydney enjoy a 3.3% yield.
"On the unit side, the CBD is the clear winner for average rental yield at 4.4%, while the Hills Districts, south- western Sydney and western Sydney were at 4.1%," the valuation firm added.
With yields at 10-year lows across most parts of Sydney, investors are looking at alternatives to the standard house or unit to help improve their potential yields, HTW noted.