More than half of all unit markets nationwide and a third of all house markets are now achieving high enough rental yields to generate a positive cash flow.
More than half of all unit markets nationwide and a third of all house markets are now achieving high enough rental yields to generate a positive cash flow, as the sharp rise in rents and falling prices offset the increase in mortgage rates, data from CoreLogic shows.
Tim Lawless, CoreLogic research director, said the brisk recovery in gross rental yields could make more properties cash flow positive in the coming months.This would help investors cope with the pressure of rising interest rates and cost of living, reduce the risk of forced selling and put a floor on price falls.
In NSW, units in Central Coast suburb Berkeley Vale are achieving 5.2 per cent gross yields, 4.8 per cent in Mascot and 4.5 per cent in Rosebery, generating a monthly cash flow of $437, $393 and $350 respectively.Meanwhile, unit landlords in Melbourne city and West Melbourne are pocketing up to $683 each month as yields rise to 5.6 per cent.
Yield is calculated by taking the annual rental income of the property, dividing it by the median value and then multiplying it by 100. Based on the current level of mortgage rates, a 4.5 per cent gross yield generally generates a positive cash flow before other costs.
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