Strong rental returns across Australia are delivering yields above 10% in some areas, but finance professionals caution against evaluating investments on yield alone.

New research from Savings.com reveals 18 suburbs with house rental yields exceeding 10%, with unit markets also performing strongly.

However, Hotspotting’s Terry Ryder notes many of these high-yield areas are remote, reliant on single industries, and present limited long-term capital growth, factors critical for responsible lending assessments.

Lightning Ridge (NSW) and Coolgardie (WA) top the list for house yields at 19.4% and 17.3%, respectively, though lenders may view these markets as high-risk due to economic concentration and low borrower stability.

Conversely, the unit market shows promise within capital cities, where growth prospects are more favourable.

Darwin leads with 17 suburbs in the top 100, followed by Perth (12), Melbourne (6), Brisbane (2), and one each in Adelaide and Canberra.

Brassall in Ipswich (Greater Brisbane) was the best-performing capital city unit market with an 11.4% yield, offering a more balanced opportunity for borrowers and lenders seeking both yield and capital growth potential.