What are the best-yielding suburbs for rental properties in New South Wales?
Suburb Help would argue that that’s not the right question. Because if you want to buy an investment property that delivers a strong cashflow, it might be better to focus on the highest yielding suburbs in Australia, rather than arbitrarily limiting yourself to just one state.
That said, New South Wales is a populous state with a wide variety of regional property markets, so, if you do want to confine yourself to that part of the country, there are locations that offer some of the highest rental yields in Australia.
According to the 2016 Census, there are 40 locations in regional New South Wales that have a population of at least 10,000 people:
Suburb Help researched those 40 locations in April 2022, as well as other regional property markets, to find suburbs with some of the highest gross rental yields in regional New South Wales.
Before we present our findings, please note that we haven’t simply presented a list of the markets that are offering the highest rental yields right now, because those kinds of lists are much less insightful than they appear at first glance.
To give property investors real value, we’ve filtered out locations that are very volatile – i.e. those whose rental yields can vary significantly from month to month. We’ve also excluded locations with concentrated economies and low owner-occupier appeal, because there are real doubts about the long-term viability of such property markets. As a result, the list below doesn’t just focus on the present, it also looks to the future.
The suburbs above offer some of the highest rental yields in Australia, let alone regional New South Wales. That said, they might not be the best places for you personally to buy an investment property.
At the start of the article, we raised the issue of whether you should be looking for high-rental-yield suburbs in Australia or just regional New South Wales. There are exactly 100 regional locations in Australia with a population of at least 10,000 people, and 60 of those are outside New South Wales. So if you broaden your search, you might find a better regional location offering higher rental yields in a different state.
There’s also another issue worth considering – should you focus on cashflow or would it be better to buy investment properties that are likely to deliver long-term capital growth? Generally, properties with high yields have low price growth, and vice versa, which is why you need to decide whether rental yield or price growth are more important to you.
Suburb Help believes that, for most investors, it’s better to choose ‘capital growth properties’ over ‘cashflow properties’. That’s because history suggests that, on average, capital growth properties deliver a higher overall return (i.e. capital growth plus rental income) over the long-term than cashflow properties. Two caveats, though, apply:
You need to settle on a property investment strategy before you research locations, because where you buy will be influenced by what you buy.
It’s important to give serious thought to both matters, because your choice of strategy and location will significantly impact your long-term return.