Perth Apartments Outyield Houses on Short-Term Rental

Apartments outyield houses in Perth on short-term rental for one structural reason: entry prices are roughly 40% lower for a comparable bedroom count, but nightly rates fall by far less. The dollar gap between a $304 house night and a $221 apartment night does not justify paying nearly twice the purchase price if cash yield is your priority. Across this market, apartments average a higher gross short-term yield than houses, with the gap measured before strata levies that erode the apartment advantage. These are city medians across 1 suburb in our Perth dataset, so your specific suburb may sit well above or below.

Bedroom-by-Bedroom: Where Each Property Type Wins

City-median gross short-term yields work out at 1.4% for houses and 1.9% for apartments, a gap of 0.5% in favor of apartments before strata levies. Bedroom-level breakdowns and long-term rental yields are available per suburb in the dashboard.

Figures from the single Perth area in our dataset. Gross yields before body corporate (apartments) and before operating costs.

The same table also shows long-term rental yields side by side, which matters because many investors run a hybrid analysis: they want to know whether a property they buy as a holiday rental could fall back to a long-lease tenancy if rules tighten or demand softens. In Perth, the apartment yield advantage tends to be wider on short-term rental than on long-term rental, because tourist nightly rates do not penalise smaller footprints as heavily as monthly rents do. That asymmetry is also relevant to negative gearing, discussed later, since the long-term rental column is what the tax office sees when you calculate cash losses to offset against salary income.

Why Apartments Yield More: Lower Entry, Sticky Nightly Rates

The gap is a price-mechanics story. A 2-bed apartment in Perth sells for around $454,436, while a 3-bed house clears around $776,814. The apartment costs roughly 58% of the house, but a guest paying $221 a night for the apartment compares it to $304 for the house, a ratio of about 73%. The denominator (purchase price) shrinks faster than the numerator (nightly revenue), and the yield arithmetic does the rest. This pattern shows up consistently in capital-city Australian markets where high-density stock sits inside the same tourist catchment as detached homes.

Body corporate levies pull back the headline advantage. Perth strata schemes typically charge between $3,500 and $7,000 per year for a standard 2-bed apartment, with mid-rise riverside or beachfront buildings (think pools, gyms, lift maintenance) running well above that. Luxury Elizabeth Quay or South Perth riverfront stock can exceed $10,000 in annual contributions once special levies for facade or lift refurbishment are included. None of this is deducted from the gross yields shown in the table, so the effective apartment advantage is narrower than it looks at face value.

Strata by-law risk is the other apartment-specific consideration. A growing share of Perth strata schemes have voted to restrict or ban short-term letting, particularly buildings that lean owner-occupier. Always read the by-laws and minutes from the most recent annual general meeting before exchange, because retrofitting a holiday rental strategy onto a building that has banned it is not a fight you will win.

The Bedroom Count Curve: Read the Direction by Type

House yields and apartment yields do not move in the same direction as bedroom count rises, and that divergence is the actionable insight in this article. For houses, larger configurations tend to hold or improve their short-term yield because group travelers and family bookings pay disproportionately more per night for an extra bedroom than the purchase price differential demands. For apartments, the curve often softens at the 4+ bed end because three- and four-bedroom apartments command very high entry prices in premium buildings, but nightly rates plateau as guests substitute toward houses for that size of group.

Read the long-term rental columns separately. Monthly rents scale more linearly with bedroom count than nightly rates do, so the long-term yield curve is usually flatter and the house-versus-apartment gap is smaller. The 4+ bed category bundles 4, 5, and 6+ bedroom listings, so treat that row as directional rather than precise; a handful of high-end Cottesloe or Dalkeith outliers can pull the median in either direction.

Suburb Variation Matters More Than the City Median

City medians flatten the differences that actually drive an investment decision. PERTH (Unknown) - Central prints a 4.0% long-term gross yield at a median sale price of $776,814 on weekly rent of $594 ($2,575/month), but riverside Perth pockets and beach-adjacent western suburbs sit well below that figure, while outer-ring suburbs and corridor stations can sit well above. The dashboard shows suburb-level data for every bedroom count and property type, so you can compare within the specific area you are evaluating instead of relying on a single citywide number.

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 $3,500 to $7,000 per year for a standard 2-bed apartment in Perth, with luxury riverfront or beachfront buildings running well above that range. None of this is deducted from the gross yields in the table above.
• Capital appreciation: Houses usually outperform apartments on long-term value growth in Perth because you own the underlying land, and Perth land scarcity in established suburbs (Subiaco, Mount Lawley, the western coastal strip) has historically driven strong house growth relative to apartment stock.
• Renovation potential: Houses offer optionality (extensions, granny flats, pool additions, knockdown-rebuild) that apartments simply cannot match. Western Australia's relatively permissive secondary dwelling rules make this more valuable than in tighter planning regimes.
• Financing constraints: Some lenders restrict mortgages on small apartments (under 50 sqm), high-rise stock, or buildings with high investor concentration. Pre-approval on apartment stock is not as automatic as it is for freestanding houses.
• 4+ bed data breadth: The 4+ bed category bundles 4, 5, and 6+ bedroom listings. A small number of premium-end properties in suburbs like Cottesloe, Peppermint Grove, or Dalkeith can pull the median in either direction.

Perth in National Context: Premium Market, Modest Yield

Perth's median 3-bed house price of $776,814 sits below the Western Australia state median of $788,188 and well below the national median of $833,886, while the long-term gross yield of 3.9% compares to 4.5% for Western Australia and 4.0% nationally. That positions Perth as a market where the appreciation thesis carries more of the return than current cash yield does, particularly for houses on land in established suburbs. For apartments, the cash yield tilt is more favorable, but you trade away some of the land-driven capital growth that has historically defined Perth wealth creation.

The implication for the house-versus-apartment decision: if your priority is long-term wealth from land and your borrowing capacity supports the higher entry price, a house aligns with the structural growth pattern of this market. If your priority is current cash flow from short-term rental and you accept the strata constraints, an apartment delivers a stronger gross yield, narrowed by levies but still meaningful.

Negative Gearing: Why the After-Tax Picture Differs

The pre-tax yield comparison in the table above is only half the analysis for Australian investors, because negative gearing shifts the long-term rental position. If your rental loss (rent minus interest, costs, and depreciation) is, say, $15,000 in a given year, that loss can be offset against your salary income to reduce your taxable income. The size of the benefit scales with your marginal tax rate.

At the 45% top marginal rate (taxable income above $190,000), each $1 of rental loss saves $0.45 in tax, so a $15,000 loss returns $6,750 in tax savings. At the 37% bracket ($135,000 to $190,000), the same loss returns $5,550. At the 30% bracket ($45,001 to $135,000), it returns $4,500. A long-term rental property running a modest pre-tax loss can therefore deliver a positive after-tax cash position once the salary offset is factored in, which is the entire reason negative gearing has remained a fixture of Australian investor strategy for decades.

Depreciation amplifies the effect. The building depreciation allowance lets you deduct 2.5% of the original construction cost per year for buildings less than 40 years old, and fixtures and fittings depreciation (air conditioning, carpets, ovens, blinds, hot water systems) adds further non-cash deductions. Newer apartments typically generate larger depreciation deductions than older established houses, which can push the after-tax position of a newer apartment ahead of an older house even when the headline yield looks similar. Short-term rental properties that are profitable do not benefit from negative gearing in the same way, because there is no cash loss to offset.

The 50% capital gains tax discount applies equally to both strategies for properties held longer than 12 months. The dashboard calculates your after-tax position including negative gearing and depreciation based on your income, so enter your salary to see how the tax treatment changes the short-term rental versus long-term rental comparison for your specific tax bracket.

Regulatory Context for Perth Investors

Verify current state and council rules before investing; this is an active legislative area in Australia. Western Australia and individual councils set short-term rental requirements, and individual strata schemes can impose by-laws that further restrict short-term letting. Confirm current registration requirements, council planning approvals, and any building-specific by-laws before exchanging contracts.

Data reflects market conditions as of May 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.