An Outback town with subterranean homes named Australia’s top rental property

A rural town where part of the population lives underground has surprised real estate investors by bringing rental benefits that undercut the city’s operations.

The latest REA Market Trends report shows that Coober Pedy in South Australia has the highest rental yield in the country, at 17.9 per cent of houses.

Other cities making the top 25 list for rental yield are spread across the Northern Territory, Queensland and Western Australia, and were dominated by housing estates.

The most active cities include the most popular tourist destinations, mining and defense cities.

The gross rental income is a basic measure of the property’s earning potential calculated by dividing the annual rental income by the value of the property and multiplying it by 100 to get the percentage value.

Coober Pedy, known for its underground houses, called “dug-outs”, came out on top with the median house price in the opal capital at just $76,250, while the average weekly rent is $263.

According to the tourism website Coober Pedy, about 50 percent of the town’s approximately 2,500 residents live underground.

“The soil on the hillside of Coober Pedy is stable enough to allow a large ceiling space in the rooms and it is not unusual for a mining family to buy a compound and a tunnel to connect two, or three or four dwellings,” the website said.

“Some mansion-style homes spread up to 450 square meters underground.”

Currently on the market for $195,000 is a three-bedroom basement apartment that rents for $290 a week.

The renovated three-bedroom is listed for $225,000 and has a rental rate of $260 per week.

A four-bedroom dig described as ‘Alladin’s secret hideaway’ that was listed for $250,000 is now up for grabs.

According to the SQM survey, the vacancy rate in Coober Pedy in December was just 0.4 per cent.

Andrews Property Regional South Australia agent Misty Mance, who is selling in Coober Pedy, said the buyers were both investors and owner occupiers.

“The stock is small and I am selling to a few people who are renovating the excavated areas so I hope we will find other places to rent,” he said.

Ms Mance said they were selling and renting to “all walks of life”, from singles and families, to people looking for cheap accommodation away from the cities.

“Some work in opal mines, some work for local businesses, some work for Centrelink,” she said.

“Rent is between $200 and $300, maybe more, so they get more out of their paycheck, and Coober Pedy has a great community spirit.

“The dug-outs also stay at around 24C all year round to save on heating and cooling.”

Ms Mance added that the population stays around 1800 but often rises to 3500 “in season”, which runs from March/April to October/November.

“At that time, a lot of recreational miners come to town when it’s cool to run the machines during the day,” he said.

Although in summer it can be 47C and you work in the morning or evening.

The hottest day ever recorded in Coober Pedy was 48.3C, recorded on 20 December 2019.

Coming in second place with a rental yield of 12.89 per cent was Berrimah in the Northern Territory.

The suburb of Darwin has a median house price of $345,000 and a median weekly asking rent of $855.

In third place was Pioneer, a suburb of Mount Isa in western Queensland, with a rental yield of 12.03 per cent.

Rounding out the top five were Millars Well (12.02%) and Southern Cross (11.91%), both in Western Australia.

In comparison, the lowest rental yields can be found in the suburbs of Sydney, Geelong in Victoria, Adelaide, and inner city Brisbane.

Seven of the worst performing rental housing areas were built in NSW, while the top five performers were led by Luddenham in south-west Sydney with a rental yield of just 1.29 per cent, Bellevue Hill in Sydney (1.45%) and Northbridge in Sydney (1.47%), Collinde Hydeide and Adela 1%) in Collinswood (1.47%), Collindeide Park and in Adelaide 1%. (1.49%).

At the time, for units, nine of the top 10 places with the highest rental yields in the country were in Western Australia, led by Newman.

Located in the Pilbara region, an area with low vacancy rates and close to mining operations, the median unit price is $209,000 while the median weekly rent is $550.

That equates to a gross index rent of 13.68 percent.

Hot on its heels is Pegs Creek, also in the Pilbara, where the median unit price is $500,000 and the median weekly rent is $1150.

Rounding out the top five were Boulder and South Hedland, both with rental yields of 11.69 per cent, and Port Hedland (10.62%).

Outside of Western Australia, Sadadeen in the Northern Territory came in eighth place with 9.88 percent.

Other top players in the top 25 for employment yield include Middlemount and Moranbah in Queensland, Whyalla Norrie in South Australia and Seymour in Victoria.

Both Queensland towns are located in the area of ​​mining resources, and Whyalla Norrie and Seymour are both agricultural areas with important defense training facilities.

But conversely, while Moranbah’s vacancy rate is much higher than the average for an overcrowded state, it continues to rank high in rental yields due to its proximity to mining areas.

The latest REIQ Vacancy Report, released at the end of last year, revealed that the Isaac region, which includes Moranbah, has the highest vacancy rate in the province at 5.5 per cent, compared to the state average of just one per cent.

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Infinity Property Specialists principal Marie Dowie, who sells in Moranbah, said rental yields were still high despite high vacancies.

“Because it’s mostly rent-subsidized mines, the market price has always been at that high level, and the rental yield is more than ten percent,” he said.

“The vacancy rate is always high at this time of year because Moranbah is a transient town and people tend to leave at the end of the year and start coming back now.

“Vacancies will start to tighten again, and will likely drop by about half by March.”

Ms Dowie said about 80 per cent of buyers were investors, mostly from Sydney and Melbourne, but also from Brisbane and Perth,

“Some are investors who are attracted by the return of money, but there has been a large increase in funds since the reduction of services,” he said.

“Prices have doubled in the last 10 years but they’re not back to the crazy prices of 2012 … they’re still about 30 percent off that peak price.”

The median house price in Moranbah is currently $394,944 with the median rent asking $700 per week, according to the latest REA Market Trends report.

Ten years ago, the median sales price was only $175,000 after rising to nearly $750,000 in 2012.

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TOP 25 HIGHEST RENTAL YIELD PROPERTIES – HOMES

(Sub-area/Region/Average Price/Average Rent/Rental Yield)

Coober Pedy SA $76,250 $263 17.90%

Berrimah NT $345,000 $855 12.89%

Pioneer QLD $194,500 $450 12.03%

Millars Well WA $562,500 $1300 12.02%

Southern Cross WA $155,000 $355 11.91%

Menzies QLD $210,000 $470 11.64%

Collinsville QLD $201,500 $450 11.61%

Newman WA $360,000 $795 11.48%

Kambalda East WA $170,000 $370 11.32%

Baynton WA $780,250 $1650 11%

Nickol WA $680,000 $1375 10.51%

Pegs Creek WA $581,250 $1175 10.51%

Mornington QLD $237,500 $480 10.51%

Coolgardie WA $198,500 $400 10.48%

Kambalda West WA $200,000 $400 10.40%

Townview QLD $241,000 $475 10.25%

Champion Lakes WA $382,000 $750 10.21%

Sunset QLD $258,000 $500 10.08%

Henley Brook WA $389,000 $750 10.03%

Port Hedland WA $785,000 $1500 9.94%

Soldiers Hill QLD $264,500 $500 9.83%

Dysart QLD $240,000 $450 9.75%

South Boulder WA $300,000 $560 9.71%

Bulgaria WA $600,000 $1100 9.53%

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TOP 25 TOP RENTAL OPENINGS – UNITS

(Sub-area/Region/Average Price/Average Rent/Rental Yield)

Newman WA $209,000 $550 13.68%

Pegs Creek WA $500,000 $1150 11.96%

Boulder WA $238,000 $535 11.69%

South Hedland WA $317,000 $713 11.69%

Port Hedland WA $440,607 $900 10.62%

Broome WA $450,000 $888 10.26%

Beresford WA $175,000 $340 10.10%

Kalgoorlie WA $293,000 $560 9.94%

Sadadeen NT $292,000 $555 9.88%

Middlemount QLD $210,000 $390 9.66%

South Kalgoorlie WA $270,000 $500 9.63%

Bulgaria WA $352,500 $650 9.59%

Cable Beach WA $435,000 $800 9.56%

Moranbah QLD $384,000 $700 9.48%

Somerville WA $339,500 $600 9.19%

Whyalla Norrie SA $141,750 $2509.17%

Karama NT $300,000 $500 8.67%

Wagaman NT $291,000 $480 8.58%

Larapinta NT $270,000 $440 8.47%

East Side NT $284,750 $460 8.40%

Coolalinga NT $305,000 $490 8.35%

Woodroffe NT $300,000 $480 8.32%

Seymour VIC $231,750 $370 8.30%

Withers WA $267,500 $423 8.21%

Gray NT $318,000 $500 8.18%

(Source: REA Market Trends January 2026)