What is a good rental yield in Sydney?

Sydney rental yields have run structurally below the national average for over a decade because median prices grow faster than median rents. As of early 2026, the typical inner-Sydney house yields 2.5-3.5% gross. Outer suburbs reach 4.0-4.5%. Units citywide trend 4.5-5.5% gross.

What counts as 'good' depends on your strategy. Capital-growth-led investors target Sydney even at 3% gross because long-run capital growth has averaged 7-8% per year (with cycles). Cashflow-led investors typically avoid Sydney entirely and target Brisbane/Adelaide outer suburbs where 5-6% gross + 4-5% growth holds.

Net yield (gross minus rates, insurance, management, vacancy, maintenance) is typically 1.0-1.5 percentage points below gross. So a Sydney unit yielding 5.0% gross delivers 3.5-4.0% net before tax. Tax effects (negative gearing, depreciation) shift the after-tax figure further.

Sydney's structural yield compression is driven by foreign + domestic demand for capital-secure assets, planning constraints in inner suburbs, and population growth concentrated in metro Sydney. None of those reverse quickly. If yield is your priority, look interstate.