Perth Apartments Out-Yield Houses on Short-Term Rental

Apartments out-yield houses on short-term rental income in Perth because their entry prices are meaningfully lower while nightly rates do not fall in proportion. The pattern shows up across the bedroom counts in our dataset: apartment short-term gross yields average 1.9% compared with 1.4% for houses, a gap of 0.5%. These are gross figures, before strata levies on apartments and before operating costs on either type, so the after-cost picture narrows the gap.

The numbers below reflect our Perth dataset; your specific suburb may sit well above or below these values, particularly in coastal pockets and inner-city precincts where nightly rates command a premium.

How Houses and Apartments Compare at Each Bedroom Count

City-wide, apartment short-term yields average 1.9% versus 1.4% for houses, with both property types broken out by bedroom count for every suburb in our Perth dataset.

Perth dataset medians. Gross yields before body corporate (apartments) and before operating costs.

One pattern worth pulling out of the table: the short-term yield gap between apartments and houses is widest at the smaller end of the bedroom range, where apartment entry prices are most competitive against the cost of a freestanding house. On long-term rental, the gap is narrower because weekly rents track the property more closely than nightly rates do, so the price advantage of apartments translates into less of a yield premium when you switch from short-term to long-term rental. That distinction matters later when we talk about negative gearing, which typically applies to long-term rental properties.

Why Apartments Win on Gross Yield, and What Brings Them Back to Earth

The mechanism is purchase price, not nightly rate. A typical apartment in Perth sells for around $454,436 compared with $776,814 for a typical house. The apartment costs roughly half as much to buy, but its nightly short-term rate does not fall by half. Guests pay for the bed count and the location, and a well-located 2-bed apartment within walking distance of the river or the CBD can command a nightly rate close to a comparable house. Lower denominator, similar numerator, higher gross yield.

The catch is body corporate (strata) levies, which are not deducted from the gross yields shown in the table. For a 2-bed Perth apartment, strata is estimated at around $3,531 per year, with significant variation: walk-up brick blocks in inner suburbs sit at the low end, while newer towers with a pool, gym and concierge can charge two to three times that figure. Houses have no equivalent fixed levy, so the effective gap between apartment and house yields is smaller than the gross numbers suggest once these costs come out.

There is also a regulatory layer specific to apartments: many strata schemes have by-laws restricting or banning short-term rental, and these vary building by building. No specific data for PERTH (Unknown). Check TAS state regulations for requirements. Verify current state and council rules before investing; this is an active legislative area in Australia. Always read the strata by-laws before signing a contract on an apartment intended for short-term rental.

How Yields Move with Bedroom Count

For houses, gross short-term yields tend to rise with bedroom count because larger properties command disproportionately higher nightly rates from groups, families and corporate retreats, while purchase prices do not scale at the same pace per bedroom. Long-term rental tells a different story: weekly rents per bedroom flatten out at the upper end, so the long-term yield curve is much shallower than the short-term curve.

For apartments, the curve typically peaks in the 2-bed and 3-bed range. Small 1-bed units have steady demand from couples and solo travellers but limited capacity; very large apartments (4+ bed) are a thin slice of the Perth market and the median price often jumps sharply because the available stock is concentrated in luxury developments. Treat the 4+ bed apartment figures with extra caution: they bundle 4, 5 and 6+ bedroom listings, and a small number of premium properties can pull the median in either direction.

Suburb-Level Numbers Vary More than the City Median Suggests

PERTH (Unknown) - Central sits at the top of the ranking with a gross long-term yield of 4.0%, against a city median of 4.0%. Coastal premium pockets typically compress yield while outer suburbs deliver stronger cash returns at the cost of softer capital growth. The dashboard shows suburb-level data for every bedroom count and property type, so you can compare within the specific area you are evaluating.

View Perth in the dashboard → Free preview · every bedroom count and property type

What the Yield Table Does Not Capture

• Body corporate levies: Estimated at around $3,531 per year for a 2-bed apartment in this market, not deducted from the gross yields above. Larger or amenity-rich buildings can run materially higher.
• Capital appreciation: Houses usually outperform apartments on long-term value growth in Perth because you own the underlying land. Apartment value sits more in the building, which depreciates, and supply can expand quickly when developers respond to demand.
• Renovation potential: Houses offer optionality (extensions, granny flats, pools, subdivision in the right zone) that apartments cannot match. This optionality is not in the yield figures but is real future value.
• Financing constraints: Some lenders restrict mortgages on small apartments (under 50 sqm) or on buildings with high investor concentration, which can affect both your purchase finance and a future buyer's ability to fund the property.
• 4+ bed data breadth: The 4+ bed category bundles 4, 5 and 6+ bedroom listings. A small number of outlier properties can pull the median in either direction.

Where Perth Sits Against State and National Medians

A 3-bed house in Perth sells for around $776,814, compared with a Western Australia median of $788,188 and a national median of $833,886. Gross long-term yield in Perth at 4.0% sits close to the national median of 4.0% and below the state average of 4.5%, which is lifted by higher-yielding regional and mining-adjacent markets. The framing for Perth is appreciation as much as yield: it is a capital city with constrained inner-ring supply and strong long-term demographic tailwinds, so the house-vs-apartment decision is partly a bet on which type of stock will appreciate faster, not just which one cash flows better today.

Negative Gearing and Tax Treatment Tilt the Comparison Toward Long-Term Rental

Negative gearing allows rental property losses (where deductible expenses exceed rental income) to be offset against your salary or wage income, reducing taxable income. The benefit overwhelmingly accrues to long-term rental investors, because long-term rental properties often run at a small cash-flow loss in the early years when mortgage interest, council rates, insurance and management fees together exceed the rent. A profitable short-term rental, by contrast, has no loss to offset and so derives no benefit.

The benefit scales with your marginal tax rate. On a $10,000 rental loss, an investor on the 30% bracket ($45,000-$135,000 income) saves $3,000 in tax; an investor on the 37% bracket saves $3,700; an investor on the top 45% bracket (income above $190,000) saves $4,500. Depreciation amplifies this further. Newer properties qualify for two non-cash deductions: the building depreciation allowance (a fixed 2.5% of the building's construction cost per year, available for buildings less than 40 years old) and fixtures and fittings depreciation (air conditioning, carpets, blinds, appliances). For a property in this market, the modelled depreciable building value is around $621,451, generating roughly $15,536 per year in non-cash deduction.

The 50% capital gains tax discount on properties held longer than 12 months applies equally to both strategies and partly compensates for the lower cash yields on long-term rental. The overall effect is that the after-tax comparison between short-term and long-term rental can look very different from the pre-tax table above. A long-term rental house showing a modest pre-tax loss may deliver a positive after-tax return for a high-income investor once negative gearing and depreciation are factored in.

The dashboard calculates your after-tax position including negative gearing and depreciation based on your income; enter your salary to see how the tax treatment changes the short-term rental versus long-term rental comparison for your specific tax bracket.

The Decision in Practice

For a Perth investor focused purely on cash yield from short-term rental, well-located 2-bed and 3-bed apartments offer the strongest entry point, provided strata levies and by-laws permit short-term rental. For investors weighting capital growth and long-term flexibility, 3-bed and 4+ bed houses are the more conventional play and benefit most from negative gearing and depreciation when held as long-term rentals. The middle path, a 3-bed house held as a long-term rental with the option to convert to short-term in peak summer months, often produces the most defensible after-tax return for a high-income investor.

For investors comparing Perth against other Australian capitals, similar dynamics play out in eastern markets. Western Australia Rental Investment Insights sets out the broader state context, and Perth Short-Term Rentals Gross 72% More Than Long-Term compares short-term and long-term rental returns in the same market. For methodology detail, see our data sources and market score methodology.

Data reflects market conditions as of April 2026.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.