There are still plenty of locations where rental returns will cover mortgage repayments for investors according to a new analysis by PropTrack. It says despite interest rate rises in recent years, investors can find locations where rental yields are high and properties affordable to buy.

PropTrack senior economist Eleanor Creagh says rising rents and low vacancy rates mean investors are returning to the market. She says rents are growing at a faster rate than property prices, pushing gross rental yields to the highest point in almost four years. Across the combined capital cities, they hit 4.3% in the March quarter, and in regional Australia, they were 4.6%. Unit rental yields are higher, 4.9%, than houses 3.9%. Creagh says in capital cities the suburbs with the highest rental yields tend to be found in the outer suburbs.

House yields are strongest in:
Melbourne: Wollert, Coolaroo and Dallas.
Canberra: Phillip, Coombs and Isabella Plains.
Sydney: Killarney Vale, Watanobbi and Blue Haven.
Adelaide: Elizabeth North, Smithfield Plains and Davoren Park.
Hobart: Gagebook, Clarendon Vale and Bridgewater.
Greater Brisbane: Laidley, Churchill and North Booval.
Perth: Hilbert, Medina and Stratton.
Darwin: Moulden, Gray and Woodroffe.