Where to Buy in Perth: Outer Suburbs Lead on Rental Yield

Perth's median 3-bed house yields 4.0% as a long-term rental, trailing the WA state median of 4.5% and matching the national median of 4.0%. That city-wide figure conceals a wide geographic spread: outer growth corridors and older working suburbs routinely deliver gross yields well above the metro average, while premium riverside and western coastal suburbs sit materially below it. Where you buy in Perth therefore matters more for income than how you let the property, and short-term rental (where permitted) lifts the city-median gross yield from 4.0% to 6.9%.

This ranking shows the reference suburb in our dataset and explains the structural pattern driving Perth's yield map, so you can interpret any specific suburb on the dashboard.

The Central Perth Reference Yields 4.0%

Gross yields = annual income / sale price. Based on 3-bed house medians. The dashboard tracks every Perth suburb separately with full property-type and bedroom-count breakdowns.

Treat this as the anchor point. The suburbs discussed below sit above or below this 4.0% long-term yield based on their price-to-rent geometry, which is driven far more by how far the suburb sits from the Swan River and the coast than by any dashboard metric.

Outer East and South-East Lead on Yield

Perth's highest-yielding postcodes consistently cluster in the outer east and south-east: areas like Armadale, Kelmscott, Gosnells, Maddington, Midland, Balga and parts of Mandurah on the Peel boundary. The pattern is structural rather than cyclical. These suburbs sit well below the metro median sale price of $776,814 for a 3-bed house, but they capture proportionally more rent because Perth's rental pool has broadened dramatically over the past three years. Interstate migration and a very tight vacancy rate have pushed tenants outward, and the weekly rents in those outer corridors have lifted faster than their prices.

The north-east growth corridor (Ellenbrook, Aveley, Brabham, Henley Brook) operates on similar logic. Newer land releases produce 3 and 4-bed houses priced below the metro median, with rents underpinned by young-family demand and limited nearby alternatives. For long-term rental yield, these outer areas typically run roughly one to one-and-a-half percentage points above the 4.0% city median.

Short-term rental reshuffles the ranking. The coastal strip (Scarborough, Trigg, City Beach) and Fremantle command materially higher nightly rates and occupancy than the outer suburbs, even where their long-term rental yield is lower. A Scarborough property may trail an Armadale equivalent on long-term rental yield but beat it decisively on short-term gross revenue, provided the strata and council allow it. The dashboard shows both sides of this comparison for any suburb you choose.

Premium Western Suburbs Trade Yield for Growth

Perth's premium western suburbs (Dalkeith, Peppermint Grove, Cottesloe, Mosman Park, Claremont, Nedlands, Swanbourne) and elevated inner-east hill suburbs trade immediate yield for capital growth and liquidity. An investor entering at two to four times the city median of $776,814 typically accepts long-term rental yields below 4.0%, often in the 2.5%–3.2% band, because buyers in that tier are paying for amenity, school catchment, river or coastal frontage and scarcity rather than rental cash flow.

The logic is not wrong, just different. Premium suburbs have historically delivered stronger capital growth across long cycles, and they remain liquid even when outer markets soften. A yield-only comparison therefore understates their total return: whether the gap is worth wearing depends on whether you believe Perth's current upswing has further to run.

Rent Falls Slower Than Price as You Move Outward

Rent does not fall as fast as price as you move outward from the Swan River, which is why Perth's yield map inverts its price map. A suburb priced near $770,190 with a weekly rent around $600 produces a gross yield near 4.0%. A suburb priced at three times that level rarely achieves three times the rent; buyers of premium stock are paying a lifestyle premium that tenants do not fully match. That arithmetic is the entire story behind Perth's yield ranking.

The trade-off is a capital-risk question rather than a right-or-wrong one. Lower-priced outer suburbs offer higher income but carry more exposure to local employment shocks, school-zone shifts, and oversupply from adjacent new-land releases. Premium suburbs have thinner rental pools but stronger downside protection on sale price. An investor entering an outer Perth suburb versus the metro median of $776,814 faces a very different capital-risk profile, and neither is automatically superior.

What a Yield Ranking Cannot Show You

Gross yield is rent divided by sale price. A suburb can appear on the high-yield list because rents are genuinely strong (good) or because sale prices have been depressed by local oversupply, a poor reputation, or a concentrated social-housing footprint (riskier). The dashboard's short-term rental and long-term rental market scores, 8.4/10 and 6.8/10 for the central Perth reference, combine yield with demand, regulation and price-growth signals to flag that distinction at the suburb level.

Yield also says nothing about capital growth. Across long horizons, Perth's premium western suburbs have outperformed outer corridors on total return in several periods, even when the yield gap sat at 150 to 200 basis points. Vacancy risk, thin rental pools in some outer postcodes, and the lag in median prices (which can trail by three to six months in a fast-moving market) are all factors a static yield table cannot capture. Use the ranking as a starting filter, then stress-test each candidate suburb for demand depth, pipeline supply, and the specific property type you are considering.

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

Perth's Yield Sits at the National Median

Perth's city-median gross yield of 4.0% sits below the WA state median of 4.5%, the state figure is lifted by high-yielding regional centres in the Pilbara and agricultural belts, but it matches the Australian national median of 4.0%. The practical read is that a typical Perth purchase delivers average income by national standards. The genuine opportunity lives at the ends of the spread: above-average yield in the outer eastern and south-eastern corridors, and above-average capital-growth potential in the premium western belt. Picking the middle of the distribution captures neither advantage particularly well.

Negative Gearing Can Tip the Balance Toward Long-Term Rental

Negative gearing allows rental losses to be offset against salary income, reducing taxable income. It overwhelmingly benefits long-term rental investors, because those properties frequently run at a cash-flow loss in early years, mortgage interest and holding costs exceed rent, which creates a legitimate tax deduction. A profitable short-term rental, by contrast, produces taxable income rather than a loss, so there is nothing to offset.

The benefit scales with the investor's marginal tax rate. At the 45% top bracket (income above $190,000), each $1 of rental loss saves 45 cents in tax. At 30% (income between $45,000 and $135,000), each $1 saves 30 cents. A Perth long-term rental running a $10,000 annual cash-flow deficit therefore returns roughly $4,500 to a top-bracket investor or $3,000 to a mid-bracket investor purely through the tax system, on top of any principal repayments and long-run capital growth.

Depreciation amplifies this further. The building depreciation allowance (2.5% of construction cost per year, available for buildings less than 40 years old) and fixtures and fittings depreciation (air conditioning, carpets, hot-water systems, appliances) are non-cash deductions that can convert a cash-flow-neutral property into a tax-positive one. For the Perth reference, the dashboard estimates annual depreciation at around $15,536 on a depreciable building base of $621,451, and applies your entered marginal tax rate when computing after-tax cashflow. Newer outer-corridor builds tend to produce the largest depreciation schedules because more of the purchase price represents modern construction and new fixtures.

The capital gains tax 50% discount applies equally to short-term and long-term rental for properties held over 12 months. Negative gearing is not free money, it requires a genuine cash loss, but it is the main reason a long-term rental showing a modest pre-tax deficit can still outperform a cash-positive short-term rental for high-income Perth investors. Enter your salary into the dashboard to see how the tax treatment reshapes the comparison for your bracket.

Transaction costs (WA stamp duty, settlement agent fees, title registration) apply on purchase; rates vary by price band and whether you qualify for first-home or off-the-plan concessions. Check with your solicitor or settlement agent before modelling a specific deal. Verify current state and council rules before investing; short-term rental regulation is an active legislative area in Australia, with several WA councils reviewing or consulting on local planning rules. For the full data sources behind these figures, 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.