Australian rental yields: new build vs existing build
New builds tempt investors with depreciation and low maintenance; existing properties usually offer a higher gross yield and no new-build premium. The right answer depends on whether you are optimising gross yield, net yield, or after-tax cash flow.
8 min read
The core trade-off
New and existing Australian property sit on opposite sides of a clean trade-off. New builds cost more up front (the developer's margin and GST are in the price), which tends to lower the gross yield — but they come with strong depreciation deductions and minimal early maintenance, which lift the after-tax position. Existing stock is usually cheaper per dollar of rent (higher gross yield) but carries older-building running costs and smaller depreciation.
New build
Higher price, lower gross yield, strong depreciation, low early maintenance. Best when after-tax cash flow and hands-off ownership matter most.
Existing build
Lower price, higher gross yield, modest depreciation, older-building upkeep. Best when gross income and buying below replacement cost matter most.
Gross yield: existing often wins
On gross yield, established properties usually have the edge, because you are not paying the new-build premium. The same weekly rent against a lower purchase price is a higher yield — that is just the yield formula. It is also why buying a brand-new apartment off the plan and reselling soon after can disappoint: the premium does not immediately translate into resale value.
About these yield figures
Rental yield percentages on this page are indicative market estimates summarising public reporting (as at early 2026) — the ABS does not publish rents, prices or yields. Demographic, tenure and dwelling figures are live from the ABS. Treat the yield ranges as direction, not a quote: the real figure for any specific property depends on its price and rent, which our calculators work out exactly.
Net yield: new build fights back
The gap narrows on net yield. New builds spend far less on maintenance and repairs in their early years — no roof, hot-water or appliance surprises — and often attract tenants willing to pay a premium for modern, efficient homes. Over the first several years, lower running costs can claw back a chunk of the gross-yield disadvantage.
The depreciation factor
Depreciation is where new builds pull ahead for many Australian investors. New properties generate larger deductions on both the building and its fixtures, which reduce taxable income and improve the after-tax return — sometimes enough to flip a negative pre-tax position closer to neutral.
Existing properties still offer some depreciation, but post-2017 rules limit deductions on previously-used plant and equipment, so the benefit is smaller. This is a genuine, if often overstated, edge for new stock.
How to decide
Match the choice to what you are actually optimising:
- Chasing gross income now? Existing stock usually wins on gross yield.
- Optimising after-tax cash flow? A new build's depreciation may swing it.
- Want hands-off, low-maintenance ownership? New build, at a lower gross yield.
- Buying for growth? Land content matters more than new-versus-old — often an existing house on good land.
Related guides
Data sources
- CoreLogic — Home Value Index & rental market data · Indicative gross rental yields and dwelling value context by capital city and region.
- Australian Bureau of Statistics — Census of Population and Housing 2021 · Renter share, dwelling type mix, household income and unoccupied-dwelling share, aggregated from SA2 level.
ABS vintage: Census 2021 · ERP 2025. Figures are population-weighted aggregates of SA2-level data.
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