- Sydney's rental market remains strong in 2024, with a 9.0% increase in rental rates and an average rental yield of 3.1%.
- Rental yields are influenced by factors such as location, property type, demand and supply dynamics, and overall economic conditions.
- The top 10 Sydney suburbs for rental yields in 2024 include Ultimo (6.1%), Homebush (6.0%), and Arncliffe (5.7%).
With rental prices continuing to rise across the nation, Sydney’s rental market has remained one of the strongest options for property investors in 2024, with the potential for high rental yields making this an attractive location for property investors.
Known as one of the most liveable cities in the world due to its culture, climate, and stunning beaches, it’s no wonder that renters are keen to live in this city. However, not all Sydney suburbs are equal when it comes to their rental potential. Here we aim to help new and established property investors gain insights into the top 10 Sydney suburbs with the highest rental yields in 2024.
But first, let’s look at how Sydney is performing as a whole.
Sydney’s rental market
While no longer reporting the strongest rental market in the country, having been surpassed by Perth and Adelaide, Sydney remains in high demand among renters and is an attractive option for property investors.
CoreLogic reports that Sydney’s rental rates have risen by 9.0% compared to 2023, exceeding the national average change of 8.5%. The city’s average rental yield stands at 3.1%.
The continued population growth in Sydney, driven by both internal migration and international immigration, has been a key factor in the rental market’s growth. This has led to increased demand for rental properties, especially in well-connected suburbs with good access to employment hubs, public transport, and amenities.
Housing supply challenges continue to influence Sydney’s rental market. Despite efforts to boost the supply of new dwellings, construction has not kept pace with the growing demand, resulting in a tighter rental market and upward pressure on rents.
Consequently, dwelling prices continue to rise, up 8.7% compared to the previous year, just slightly below the record high set in January 2022. For investors who can secure a property in the current market, the rising weekly rents and the anticipated continued growth in property values could combine to create a compelling investment opportunity.
However, not all Sydney suburbs are equally profitable for investment properties. The following table showcases the top 10 suburbs across Sydney that are currently generating the highest rental yields for investors.
Top 10 highest rental yield suburbs in Sydney
| Rank | Postcode | Suburb | Yield | 1 yr ago | 3yrs ago | Median Weekly Rent |
| 1 | 2007 | Ultimo | 6.1% | 4.2% | 2.6% | $1,023 |
| 2 | 2140 | Homebush | 6.0% | 4.5% | 3.7% | $832 |
| 3 | 2205 | Arncliffe | 5.7% | 3.7% | 3.4% | $955 |
| 4 | 2172 | Pleasure Point | 4.9% | 3.4% | 4.0% | $925 |
| 5 | 2127 | Newington | 4.7% | 5.1% | 4.1% | $1,002 |
| 6 | 2018 | Rosebery | 4.6% | 3.3% | 2.6% | $1,225 |
| 7 | 2162 | Sefton | 4.5% | 4.0% | 2.6% | $800 |
| 8 | 2085 | Belrose | 4.5% | 3.5% | 3.1% | $1,434 |
| 9 | 2199 | Yagoona | 4.4% | 3.8% | 2.5% | $761 |
| 10 | 2144 | Auburn | 4.3% | 3.4% | 2.6% | $705 |
Source: SQM Research. This list uses SQM Research data for the rental yields of houses only.
Below we look deeper into the Sydney suburbs returning the highest rental yields in the area.
#1 Highest Rental Yield Suburb: Ultimo, 2007
Ultimo tops the list as Sydney’s highest rental yield suburb, boasting an impressive average yield of 6.1%. This figure has skyrocketed over the past three years, more than tripling from its previous 2021 levels. The suburb’s median weekly rent has also experienced a significant uptick, currently sitting at $1,023, a remarkable 56% increase from the $655 recorded 3 years ago.
Despite the high rental yields, Ultimo’s residential vacancy rate in April 2024 was a modest 2.4%, with 50 properties available for rent. This low vacancy rate is a testament to the suburb’s unwavering popularity among renters.
Ultimo’s appeal can be attributed to its prime location and thriving educational hub. Situated just a stone’s throw from Sydney’s CBD within the City of Sydney, Ultimo benefits from a below-average crime rate and the presence of prestigious institutions such as the University of Technology Sydney and TAFE NSW Ultimo.
These factors combine to create a perfect storm of high rental demand, cementing Ultimo’s position as a top choice for renters and investors alike.
#2: Homebush, 2140
Hot on Ultimo’s heels, Homebush secures the second spot with a solid 6.0% rental yield for houses. This thriving suburb, located just 12km from the CBD, has seen its median weekly rent soar to $832, a staggering 72% increase from the $483 average rent recorded three years ago. Homebush’s vacancy rate has also experienced a remarkable transformation, plummeting from 6.1% in 2021 to a mere 1.6% in 2024, reflecting the suburb’s surging popularity among renters.
Homebush offers the perfect blend of residential charm and commercial vitality. The suburb seamlessly combines historic homes and buildings with a bustling commercial center, creating a unique and sought-after living experience for its residents.
#3: Arncliffe, 2205
Arncliffe, a hidden gem nestled just 11km south of Sydney’s CBD, has emerged as the city’s third-highest yielding suburb. With a current rental yield of 5.7%, up from 3.7% last year, Arncliffe is attracting the attention of savvy investors and renters alike. The average weekly rent for a house in this suburb has climbed to $955, a notable increase from the $843 recorded in 2023.
Arncliffe’s proximity to both the airport and stunning beaches adds to its allure, offering residents the best of both worlds. Despite its growing popularity, the suburb maintains a relatively low vacancy rate of 1.4%, with 84 rental vacancies recorded in April 2024, indicating a healthy balance between supply and demand.
#4: Pleasure Point, 2172
Pleasure Point, located in south-western Sydney, is another popular option for renters and property investors, recently returning a 4.9% rental yield. This suburb has seen a remarkable surge in average weekly rent, jumping from $648 last year to $955 in 2024, a staggering 47% increase.
Despite its small population of just 600 residents, Pleasure Point’s rental properties are in high demand, with vacancies being quickly filled. The suburb’s vacancy rate stands at a mere 0.7%, a slight increase from last year’s 0% but still indicative of a highly competitive rental market. In April 2024, only a single rental property was available, highlighting the scarcity of rental opportunities in this sought-after suburb.
#5: Newington, 2127
With an average rental yield of 4.7% and fifth on the list is Newington, located in the City of Parramatta. Although this represents a slight decrease from the 5.1% recorded last year, the suburb’s weekly rental prices have been on a steady upward trajectory. In 2023, the average weekly rent in Newington was $815, but it has since climbed to $1,002 in 2024, a decent 23% increase in just one year.
Situated just 16km south of the Sydney CBD, Newington offers its residents a coveted lifestyle with easy access to the picturesque Parramatta River and the iconic Sydney Olympic Park. The suburb’s convenient location, combined with its abundant open spaces and well-maintained parks, creates a highly desirable living environment for renters. These attractive features also make Newington a compelling choice for property investors seeking solid returns in a competitive market.
#6: Rosebery, 2018
Rosebery’s 4.6% rental yield makes it Sydney’s 6th highest rental yield suburb. Perfectly located in the City of Sydney and just 6km from the CBD, renters in this area are currently paying an average $1,225 per week in rent, a staggering 98% increase from the $619 per week they were paying just three years ago. Even compared to last year’s average of $930 per week, the current rental prices represent a significant 32% increase.
Despite the rising rental costs, Rosebery’s vacancy rate remains at a healthy 1.4%, with 69 properties available for rent in April 2024.
#7: Sefton, 2162
23km west of Sydney’s CBD and with an average rental yield of 4.5% is the suburb of Sefton. While rental prices in Sefton are slightly lower compared to other suburbs on this list, with an average of $800 per week in 2024, the suburb’s tight rental market more than makes up for it.
Sefton boasts exceptionally low vacancy rates, with last year’s rate sitting at just 0.4%. This year, the vacancy rate has only slightly increased to 0.6%, with a mere 17 properties listed for rent, highlighting the strong demand for rental properties in this area.
#8: Belrose, 2085
Nestled in the Forest District, just 19km north-east of the CBD, the leafy suburb of Belrose is a favorite among renters and property investors alike. With a rental yield of 4.5% in 2024, up from 3.5% last year, Belrose is proving to be a lucrative investment opportunity. The suburb also boasts the highest weekly rent among the suburbs on this list, with an average of $1,434 per week – the highest out of the suburbs listed here, showcasing its desirability and the willingness of renters to pay a premium for the lifestyle it offers.
#9: Yagoona, 2199
Yagoona, situated 20km south-west of Sydney’s CBD, may have lower average weekly rents compared to Belrose at $761 per week, but the suburb’s more affordable housing translates to a solid rental yield of 4.4%, up from 3.8% last year. Known for its tranquil atmosphere, Yagoona is a sought-after suburb for those seeking a peaceful lifestyle within easy reach of the city.
#10: Auburn, 2144
Rounding out the list of top 10 highest-yielding suburbs in Sydney is Auburn. Property investors in Auburn are enjoying an average rental yield of 4.3%, a significant increase from the 3.4% recorded last year. The current average weekly rental price for houses in Auburn is $705, a modest increase from the $660 renters were paying on average a year ago.
Located just 16km from the CBD and celebrated for its diversity, Auburn has seen a remarkable transformation in its rental market. The suburb’s vacancy rate has plummeted from 7.5% three years ago to a low 0.6% in 2024, indicating a surge in rental demand and a promising outlook for investors.
What is rental yield?
What is a property’s rental yield? It represents the annual income generated by a rental property as a percentage of its purchase price, or market value. It can be calculated as gross rental yield or net rental yield. Gross rental yield divides the annual rental income by the property’s purchase price or market value, multiplied by 100 to display as a percentage. Net rental yield is similar, but first subtracts all expenses associated with owning the property (maintenance, insurance, rates, and fees) from the annual rental income.
Several factors can influence rental yields, including location, property type, demand and supply dynamics, and the overall economic conditions. Properties in high-demand areas with limited supply tend to command higher rents and, consequently, offer higher rental yields.
Investing wisely in Sydney’s high-yield rental market
As Sydney’s rental market continues to evolve and present opportunities for property investors, staying informed about the suburbs offering the highest rental yields is crucial for making sound investment decisions.
While the top 10 suburbs showcased in this article are currently generating impressive rental returns, it’s important to remember that the property market is dynamic and subject to change.
Investors should consider multiple factors, such as location, property type, demand and supply dynamics, and overall economic conditions, when evaluating potential investments. Conducting thorough research, staying up-to-date with market trends, and seeking professional advice can help investors navigate the complexities of the rental market and identify the most promising opportunities.
As we move forward in 2024 and beyond, the Sydney rental market is likely to remain an attractive option for property investors, particularly in suburbs with strong rental demand, limited supply, and potential for capital growth. By carefully considering the factors that influence rental yields and making informed decisions, investors can position themselves to take advantage of the opportunities presented by Sydney’s thriving rental market.
