Two Rocks Leads Perth Yields at 6.4%

Yields across Perth's ranked suburbs span from 6.4% in Two Rocks down to 5.2% in Carramar. The city median sits at 4.0%, so suburb selection moves rental income further than the choice between long-term rental and short-term rental, especially with Western Australia's 90-night cap on unhosted short-term rentals layered on top. Below: which suburbs lead on gross yield in Perth, and why the outer northeast outpaces the premium ring.

Two Rocks Tops the Ranking at 6.4%

Gross yields are annual income divided by sale price, based on 3-bed house medians. The dashboard shows every property type and bedroom count.

Warning: short-term rental yields reflect the regulatory cap. Unhosted short-term rentals in Western Australia are limited to 90 nights per year without development approval, roughly a quarter of full-year occupancy.

Why Outer Perth Leads on Yield

Two Rocks sits at the top of the Perth ranking with 6.4% gross yield because it pairs an outer-suburb entry price with rental demand that holds up against locations costing nearly twice as much. The area sits in Perth's outer northeast, well beyond the inner-city premium pocket, with bus connections to the Perth CBD and proximity to the Wanneroo and Mirrabooka commercial hubs. Tenants paying around $780 per week are typically families and shift workers priced out of the inner suburbs, and the rental pool is deep enough to keep vacancy low even as outer-zone prices have moved up over the past few years.

Hazelmere - Guildford ranks second at 5.8%, but the path to that yield is very different. The suburb sits on the eastern edge of the Perth CBD with strong rental demand from professionals and inner-city workers, and weekly rents reach about $690. The yield comes from rent strength rather than entry-price discounts, which means the capital outlay is significantly higher than Two Rocks and the buyer is paying for inner-city access rather than just rental income. Mandurah, in third place at 5.7%, follows the same logic: a CBD-edge location where the entertainment, hospitality, and university precincts of Northbridge drive a steady, year-round tenant base.

The top three split in two directions. The leader is an affordable outer suburb where rent is modest but the entry price sits well below the city median. Second and third are inner-city locations where rents stay high enough to keep yields competitive even at price points well above about $886,000. The mid-priced ring, where prices have outrun rents, is where yield erodes fastest across Australian capitals.

The Yield-Price Trade-Off Is Steep in Perth

Buying at about $627,000 in Two Rocks versus about $886,000 at the city median is a very different capital-risk profile. The outer suburb produces more income per dollar invested, but the entry price is lower because demand pressure is lower and historical capital growth has trailed the inner ring. Investors choosing the inner and southern suburbs accept a lower yield because they are buying scarcity: there is finite land within five kilometres of the Perth CBD, and that scarcity historically supports stronger price growth and easier resale.

Carramar, sitting on the south side of the Swan River with established schools and river access, commands about $725,000 but only about $730 per week in rent, producing the lowest yield in the ranking at 5.2%. Buyers paying that premium are betting on long-term capital growth rather than near-term cashflow. Chidlow, just up the river, sits at 5.2% for the same reason. Neither is a bad investment, but they answer a different question than Two Rocks: they prioritise total return over income.

What the Yield Ranking Doesn't Show

Yield is rent divided by price, so a high yield can reflect depressed prices rather than strong rents. Two Rocks leads on gross yield, but that does not automatically make it the best total-return investment. The premium suburbs further down the table have historically delivered stronger capital growth, and total return over a hold period is the sum of income and growth, not income alone. The right answer depends on whether the investor needs cashflow now or is willing to trade income for appreciation later.

The ranking also says nothing about vacancy risk, tenant pool depth, or the specific bedroom count and property type that you might actually buy. A high gross yield in a thinly transacted suburb can mean longer vacancy gaps, harder-to-screen tenants, or maintenance costs that bite a larger share of the income. Median rent figures lag in fast-moving markets, and 3-bed house medians can mask very different economics for apartments or smaller dwellings. The dashboard's per-suburb breakdown matters more than the city-level summary if you are sizing a specific deal.

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

Perth's Yield Sits Just Below the State and National Medians

Perth's city-median yield of 4.0% sits 0.5pp below the Western Australia median of 4.5% and tracks the Australia-wide median of 4.0% closely. The top suburb at 6.4% clears the national average, while the bottom of the ranking sits well below it. The pattern mirrors most Australian capitals: outer suburbs in low-cost zones lead the income ranking, and inner premium pockets pull the city median down because their prices have outrun rents. Data sources and the market score methodology explain the underlying calculation.

Western Australia's 90-Night Cap Reshapes the Strategy Choice

Check state/council regulations for specific requirements.

For Perth investors, the regulatory layer matters because the short-term rental yields shown in the table assume the 90-night cap. At full-year occupancy a Perth short-term rental could earn substantially more than the equivalent long-term rent, but the cap limits unhosted operation to roughly a quarter of the year unless the property secures development approval. That is why the city-median short-term yield of 1.9% sits well below the long-term yield of 4.0%, and why the table shows long-term rental ahead in every ranked suburb. The equation is different for hosted properties, owner-occupiers running occasional lets, and properties that secure planning approval, which is why the regulatory pathway matters as much as the suburb choice.

Negative Gearing and Depreciation Shift the After-Tax Picture

Australian tax rules let rental property losses offset salary or wage income, which is why long-term rental investors often accept lower gross yields than the headline numbers suggest. If interest, council rates, insurance, management fees, and maintenance exceed rental income, the loss reduces taxable income at the investor's marginal rate. At the 30% bracket, a $20,000 annual loss saves around $6,000 in tax. At the 45% bracket (income above $190,000), the same loss saves roughly $9,000. The benefit is not free money, since it requires a genuine cash loss, but it shifts the after-tax cashflow comparison.

Both long-term and short-term rental can be negatively geared if interest plus deductible costs exceed rental income. Whichever strategy generates the larger tax loss qualifies for the larger salary offset, and which strategy that is depends on the specific property's price, financing, and Perth's 90-night cap. In a capped market like Perth, short-term rental income is constrained while costs (utilities, furnishing replacement, platform fees of around 15.5%) remain high, so a short-term rental property can run at a deeper loss and produce a larger gearing benefit despite weaker pre-tax economics.

Depreciation adds another layer. Capital works deductions may apply at up to 2.5% per year on eligible construction expenditure, depending on building age, construction history, and a quantity surveyor's depreciation schedule. Newer builds and recently renovated properties tend to qualify for larger claims. Fixtures and fittings (air conditioning, carpets, appliances) may add further deductions. The capital gains tax 50% discount applies equally to both strategies once a property is held more than twelve 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 comparison for your tax bracket.

What This Means for a Buying Decision

Perth's yield range is narrower than markets like Brisbane or Adelaide, where the spread between top and bottom suburbs runs to three percentage points or more. The 6.4% to 5.2% range here means suburb selection still matters, but it does not produce the dramatic income differentials seen in eastern-state capitals. Investors prioritising cashflow should look at outer suburbs like Two Rocks where entry prices are lowest. Those willing to trade yield for capital growth and tenant quality should weight the inner and southern suburbs more heavily, accepting lower income in exchange for the long-run growth thesis. Explore rental data in the dashboard to test specific price and rent assumptions for any suburb in the ranking.

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.