High regional yields and the lender’s view

Australian Broker reported regional towns with rental yields above 20 per cent, and realestate.com.au reported lenders refusing loans in particular postcodes. Both cited PIPA’s 2026 survey on investors leaving established markets.

The two reports

On the 15th of September 2026, Mina Martin reported for Australian Broker on Ray White research into regional markets where established housing is the only option available to investors. Ray White head of research Vanessa Rader identified towns in Queensland, New South Wales, Western Australia and South Australia with median house prices mostly below $300,000. Their yields ranged from 15 to more than 20 per cent. Aramac in Queensland’s central west recorded a yield of 33.9 per cent on a $120,000 median, and Mount Magnet in Western Australia 31.3 per cent on a $49,000 median. Ms Rader said the common thread is rental stock tied to mining, pastoral or government activity, and that income, not capital growth, is the return in these markets.

The next day, Lydia Kellner reported for realestate.com.au on an investor whose loan for a $305,000 renovation property in South Hedland was declined by several lenders. His broker said the lenders considered the postcode too risky, with property crime a factor. Money.com.au’s Nick Burgess explained that lenders assess resale marketability and price stability, and that a valuer’s comments on location can lead a lender to decline or to reduce the maximum loan to value ratio.

Both articles cited PIPA’s 2026 Annual Investor Sentiment Survey, which found that 18.3 per cent of investors sold at least one property in the year to August.

What a very high yield indicates

A yield of 30 per cent means the property costs about three years’ rent. Prices at that level usually reflect what the market expects about the town: dependence on a single employer or industry, a small pool of buyers and limited evidence that prices will change. Ms Rader noted that most of these towns have carried similar prices for years.

The same features are what concern a lender. A lender is assessing whether it could sell the property and recover the loan if the borrower defaulted. In a town where few properties sell, where demand depends on one mine or station, or where the valuer records crime or repair risk, the answer may be no, regardless of the borrower’s income.

Finance approval as part of due diligence

The investor in the South Hedland case said that whether a property can be financed needs to be established before committing to it. For regional and high yield purchases, that means:

• A broker’s confirmation, before an offer is signed, that lenders will accept the postcode and property type, and at what loan to value ratio.
• A finance clause in the contract for a private sale, with enough time to obtain a valuation.
• Local evidence on vacancy, the length of tenancies and the employers behind rental demand.
• An exit assessment: the number of comparable sales in recent years and the time each took, since a property that is hard to finance is also hard to sell.
• Insurance quotes, as insurers apply their own location assessments.

Questions before an offer

Whether lenders will finance the property, what drives local rental demand and how many comparable properties have sold should all be answered before an offer is made. A QPIA accredited adviser can be found through PIPA’s adviser search, and the wider questions about headline yields are set out in rising yields and who benefits from them.