Positive Cashflow Properties Australia: Best Locations

The pandemic years quietly set up a landlord’s market in many parts of Australia. When COVID hit, a large number of investors sold up and left the rental sector, reducing the supply of rental homes just as tenant demand started climbing again. The result was a rental crunch that pushed asking rents well above their pre-pandemic levels in dozens of suburbs.

At the same time, property values pulled back from their mid-2021 highs in most capital cities. When prices fall and rents rise together, rental yields improve fast. That combination is exactly what draws investors back into a market.

If you want context on where borrowing costs sit right now, our overview of home loan trends shaping 2023 is a good place to start. Understanding the rate environment helps you model cashflow projections more accurately.

Sydney’s property prices remain among the highest in the world, which makes it very difficult to find positive cashflow properties in the metro area. Regional NSW is a different story. Towns in the far west and central north offer affordable entry prices and solid rental demand driven by local industries and a limited supply of rental homes.

Based on 2023 PropTrack data, these NSW suburbs stand out on gross monthly return:

Victoria follows a similar pattern. Greater Melbourne’s prices keep cashflow positive deals out of reach for most buyers. The regional exception worth noting is Kerang, an agricultural town near the NSW border, where the median house price of $272,000 generates an estimated gross monthly return of around $200. Melbourne CBD units come in at roughly $190 per month on a $547,000 median, and Sale units offer around $180 on a $310,000 median.

Queensland consistently produces some of the strongest rental yield numbers in the country, and 2023 is no different. The combination of strong interstate migration, limited rental stock and relatively accessible prices makes it one of the better hunting grounds for positive cashflow properties Australia-wide.

Brisbane CBD units offer a reasonable starting point at a gross monthly return of $370 on a median price of $480,000. But the real standout figures come from regional centres, particularly those tied to the resources sector and north Queensland tourism.

Here are some of the top-performing Queensland suburbs in early 2023:

Many of the top-returning Queensland locations are mining towns or tourism hubs. Both carry specific risks around vacancy and price volatility that you need to factor into your decision.

Western Australia’s Pilbara region dominates the national rankings for raw gross monthly returns. Mining activity drives extremely strong rental demand, and workers often pay a premium to live close to site operations. The numbers look exceptional on paper.

Those returns are genuinely impressive, but WA mining towns come with a well-documented risk profile. When commodity prices fall or a major project winds up, rental demand can evaporate quickly and property values can drop sharply. Investors who entered these markets at the wrong point in the cycle have experienced significant losses. Thorough due diligence and a long-term view of the mining pipeline are essential before committing here.

Gross monthly return figures are a useful filter, but they are only the first step. Before you make an offer on any property, you need to build a realistic picture of what the investment will actually cost you each month and what it is likely to return net of all expenses.

Start by knowing what you can borrow. Use our calculator to check your borrowing power before you start inspecting properties. This gives you a realistic price range and prevents you from falling in love with something you cannot finance.

Next, account for all the costs of purchase, not just the property price. Stamp duty is one of the biggest upfront expenses and it varies by state and purchase price. Use our stamp duty costs calculator to get a clear figure for each state you are considering.

From there, build out your running cost estimate. Add property management fees (typically 7 to 10 percent of rent), landlord insurance, rates, and a maintenance buffer. Compare that total against a conservative rental estimate for the suburb, not the top of the range. If the numbers still work on conservative assumptions, you have found a candidate worth pursuing further.

For South Australia buyers, the northern Adelaide corridor is worth a look. Suburbs like Smithfield Plains (median $327,000, return $250), Elizabeth Downs (median $328,000, return $210), and Salisbury units (median $330,000, return $280) offer modest but steady cashflow with the stability of a capital city market. In the ACT, Gungahlin units show a $280 return on a $455,000 median, with Wright and Bruce units also delivering positive gross returns.