New figures show that yields have continued to fall across all capitals, with Sydney and Melbourne hitting record lows.
A new report from CoreLogic revealed that rental yields are generally low across the country, with houses reaching 3.2 per cent and units hitting 4.1 per cent across the capital cities.
Melbourne’s houses decreased from 3.1 per cent in June 2015 to 2.9 per cent in June 2016, while units fell from 4.2 per cent to 4.0 per cent.
Sydney’s houses fell from 3.3 per cent to 3.0 per cent and units decreased from 4.3 per cent to 3.9 per cent over the same period.
In Brisbane, houses dropped from 4.4 per cent to 4.2 per cent while units fell from 5.4 per cent to 5.2 per cent.
Canberra’s houses decreased from 4.1 per cent to 4.0 per cent and units remained unchanged at 5.1 per cent.
In Adelaide, houses fell from 4.1 per cent to 4.0 per cent while units dropped 4.9 per cent to 4.8 per cent.
Hobart’s houses decreased from 5.3 per cent to 5.2 per cent and units rose from 5.2 per cent to 5.4 per cent.
In Perth, houses dropped from 4.0 per cent to 3.8 per cent while units fell from 4.6 per cent to 4.5 per cent.
Darwin’s houses decreased from 5.8 per cent to 5.1 per and units fell from 5.3 per cent to 3.9 per cent.
CoreLogic research director Tim Lawless said, "Despite low mortgage rate settings, the low yield profile implies that the majority of recent investors will be experiencing a cash flow loss on their property after expenses are taken into account.
"Overall, the strong housing market conditions in Sydney and Melbourne are being reported, in line with high auction clearance rates and resilient levels of mortgage-related activity, and are also supported by a robust level of consumer confidence."
The CoreLogic report noted that capital city rents are recording their weakest annual change on record, and with value rises outpacing rental growth, rental yields have hit record lows and are likely to see further reductions in the coming months.
[Related: Yields down across all capitals]