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The capital city rental market saw a decrease in returns at the end of the financial year in contrast to the previous year, according to RP Data.
The June RP Data-Rismark Hedonic Home Value Index showed gross rental returns are currently recorded at 3.9 per cent for capital city houses and 4.6 per cent for capital city units.
This is a decrease in rental returns from the previous year, where capital city houses were recorded at 4.2 per cent and units at 4.9 per cent.
The yield environment is lowest across Melbourne, where gross yields are averaging just 3.4 per cent for a typical house and 4.3 per cent for units.
Darwin continues to show the highest gross rental yields at 6.1 per cent for houses and 5.9 per cent for units.
According to RP Data research director Tim Lawless, with interest remaining low for the foreseeable future, it is doubtful housing values will start to slide - at least not at a macro level.
“What is more likely is that natural affordability constraints will start to dent buyer demand, as will the low rental yield scenarios that are very much evident across the largest capital cities of Melbourne and Sydney,” he said.
From a total returns perspective, Sydney was once again a stand-out, RP Data said.
Combining the capital gain with the gross rental yield over the year has provided Sydney homeowners with a total return of 20.2 per cent over the financial year.
Melbourne, Darwin and Brisbane also recorded a total gross return in excess of 12 per cent over the year.
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