Despite property values dropping across the country in the first quarter of the year, rental yields are on the rise.
According to the latest RP Data figures, Hobart was the only capital to record a decline in rental growth.
Tim Lawless, research director at RP Data said detached housing was the big winner.
“While April’s values reduce across most capital cities, rents continued to show modest improvements. At the combined capital city level, the weekly rent on a detached house is up by 4.1 per cent over the year to April and unit rents are up by 3.7 per cent,” Mr Lawless said.
Growth in rents has been varied across the country with the largest increases in Perth where weekly rents have surged by more than 14 per cent over the year. Smaller rental increases were recorded across Sydney, Brisbane, Darwin and Canberra.
Rents in Melbourne and Adelaide were reasonably flat while Hobart went backwards by 3.9 per cent over the year.
According to RP Data, higher rents and lower home values are contributing to higher rental yields. The average capital city house is now returning a gross yield of 4.2 per cent, up from a low of 3.6 per cent just over a year ago.
Units, which typically provide a higher rental return, are providing a gross yield of 4.9 per cent, up from a low of 4.4 per cent.