Apartments are delivering stronger yields in five times as many suburbs as houses around the country’s capital city markets.
Aussie property investors chasing strong returns have a new road map, with apartments delivering stronger yields in five times as many suburbs as houses.
The August 2026 Rise and Rise of Apartments report from Nuestar and Hotspotting revealed that in Australia’s capital city markets, there were 242 suburb markets where units had yields of 5 per cent or higher compared with just 47 house markets.
Despite being one of Australia’s more expensive cities, Greater Sydney had the highest number of high-performing apartment markets.
Nuestar founder Michael Wilkins says overwhelmingly. yields for apartment markets are higher than those for freestanding houses. Picture: Supplied
Nuestar founder Michael Wilkins said that changes to investment property taxes meant new apartments were in the sights of investors more than ever because of the significantly higher rental returns.
“Overwhelmingly yields for apartment markets are higher than those for freestanding houses,” he said.
“In this climate investors need to secure positively-geared assets.
“Apartments in particular offer lower buy-in prices and stronger yields.
“In the new environment, solid yields have become just as important to investors as capital growth.”
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This two-bedroom Sydney apartment at 802/18 Harrow Rd, Auburn is on the market at $535,000.
Despite being one of Australia’s more expensive cities, Greater Sydney had the highest number of high-performing apartment markets with 75 suburbs returning yields of 5 per cent or more — because rents have been rising strongly but prices haven’t.
It had nine suburb markets with yields of 6 per cent or higher for apartments, led by Auburn in the Cumberland LGA with a median yield of 6.3 per cent.
Hotspotting founder and property analyst Terry Ryder.
Greater Melbourne had 61 apartment markets with yields of 5 per cent or higher – 13 per cent of those were 6 per cent or higher. Its highest yielding apartment market was Travancore in the Moonee Valley LGA which at 8 per cent, had the highest median yield of the markets analysed for this report.
Greater Perth had 48 apartment markets with yields of 5 per cent or more and two with median yields of more than 6 per cent, led by Perth LGA suburbs, Northbridge at 6.3 per cent and Perth at 6.2 per cent.
This two-bedroom apartment at 802/18 Harrow Road, Auburn is on the market at $535,000.
The ACT had 28 apartment markets with yields of 5 per cent or more and five of those with yields of 6 per cent or higher, led by Gungahlin with a median yield of 6.4 per cent.
Greater Darwin continued to perform well. All 21 of its apartment markets analysed for the report achieved yields above 6 per cent – eight of those had yields above 7 per cent.
The highest was 7.8 per cent in both Coolalinga in Litchfield LGA and Karama in Darwin LGA.
Aerial view of Sydney. Picture: NewsWire / Damian Shaw
Greater Hobart had six markets above 5 per cent, led by Brighton at 5.4 per cent. Greater Brisbane only had one – Brisbane City with a yield of 5.5 per cent; Greater Adelaide had two – Adelaide at 5.3 per cent and Mawson Lakes in the Salisbury LGA, with a yield of 5.1 per cent.
Hotspotting Founder Terry Ryder said it was more important than ever for investors to seek out markets which delivered strong returns.
“The apartment market has gained strength as a force for property investment and will continue to do so,” he said.
Aerial view of the Brisbane CBD.
Apartments accounted for almost 30 per cent of sales transactions in the past 12 months. In the ACT and Northern Territory, apartment sales made up 43 per cent and 40 per cent of sales, respectively.
In New South Wales, apartments accounted for 35 per cent of transactions and 29 per cent in both Queensland and Victoria.
The percentages were higher in the capital cities, particularly Sydney.
