What an Investment Property Costs You Per Week

Most people work out what an investment property costs by comparing the rent to the repayment and hoping the two are close. In seven of Australia’s eight capital cities, they are not close, and the gap is bigger than almost anyone budgets for.

We modelled it on the median dwelling in every capital: an 80% loan at 6.3%, interest only, against the gross rent that dwelling earns.

The weekly gap in every capital

Medians and gross yields are Cotality at 31 July 2026. The rate is the investor mortgage rate Cotality had running at the time.

Every figure above is interest only. Nothing for council rates, insurance, property management, letting fees, repairs or the weeks the place sits empty between tenants. Add those and every number gets worse, including Darwin’s.

It is also worth seeing the annual figures next to the deposit. A Sydney median at 80% means about $249,000 of your own money in, and then $22,901 a year going out on top. Over five years that shortfall alone adds another $114,505 to what you have sunk into the property, none of which shows up in the purchase price you tell people.

The break-even yield is 5.04%

There is a single number underneath this table. At a 6.3% interest rate and an 80% loan, the gross yield you need for rent to cover interest is 5.04%.

That is the test. Anything below it and you are funding the shortfall from your salary every week. Of the eight capitals, exactly one clears it.

The number moves with the inputs, and it moves fast. Borrow at 90% instead of 80% and you need 5.67%. If the rate drops to 5.5%, the bar falls to 4.4%, and Darwin is still the only capital that clears it, with Hobart a tenth of a point short at 4.3%. Work out your own version before you look at a single listing, because it tells you which markets can even work.

Why Sydney is the worst of them

Sydney has the biggest gap at $440 a week, which is $22,901 a year out of your take-home pay before a single expense. It gets there by combining the highest median in the country with the lowest yield at 3.2%.

That is what a decade of prices rising faster than rents produces. The asset grew, the income did not keep up, and the shortfall is carried by the owner. Brisbane is now in similar territory at $369 a week, having run hard enough to compress its yield to 3.3%.

This is the case for affordable markets over blue chip in one line: the more affordable market is not just cheaper to buy, it is cheaper to hold every week you own it.

What the tax refund covers

The shortfall is deductible today, so the real cost is lower than the table suggests. On a $120,000 income the marginal rate including Medicare is 32%, which turns Sydney’s $440 a week into about $299 and Melbourne’s $175 into $119.

That helps. It does not close the gap, and it is worth being clear about what it is: you are getting roughly a third of your loss back, not being made whole. A refund on a loss is still a loss.

What changes on 1 July 2027

From 1 July 2027, rental losses on established residential property can no longer be offset against salary. They are quarantined, carried forward against future rental income or the eventual capital gain.

For the weekly cost, that means the after-tax column reverts to the pre-tax column. Sydney goes from about $299 a week back to $440. Across a year that is $7,328 more out of pocket on the same property, with nothing about the property having changed.

The loss is not destroyed, it is deferred. But deferred help does not pay this month’s shortfall, and serviceability is a cash-flow test, not a tax one. We covered the mechanics in the 2027 negative gearing and CGT changes, and the effect here is simple enough: yield stops being a nice-to-have and starts being the thing that decides whether you can hold.

What to check before you buy

Run the interest test first. Gross yield against your actual rate and loan size. If the property fails it, you are not buying an income asset, you are buying a growth bet you have to fund weekly.

Budget the other costs. Rates, insurance, management, maintenance and vacancy all come out of gross rent before you see a dollar of it. Our cash flow calculator runs the full picture rather than the interest line alone.

Stress-test at a higher rate. If it only works at today’s rate, it does not work. The RBA has moved three times this year.

Check the yield is current. Yields compress when prices rise faster than rents, so a figure from twelve months ago is often a point too high. That single error has undone more investor budgets than any other.

Where this leaves the decision

None of this is an argument against buying. It is an argument for knowing the weekly number before you commit, and for treating yield as a requirement rather than a bonus. A property that costs you $440 a week has to grow a long way just to pay you back for holding it.

The markets where the numbers work are mostly not the capitals, which is why we buy in every state rather than the one an investor happens to live in. Growth still matters as much as yield, and our note on growth versus rental yield covers why you need both rather than either.

Darwin was the only capital to clear the 5.04% bar, and the suburb data goes further: see the best suburbs to invest in Darwin for five that clear it with room to spare.

This is general information only and not financial advice. The figures here are a model using published medians and yields, not a quote for any specific property. Speak to a qualified professional before making investment decisions.

If you want the weekly numbers run on a specific brief before you commit, book a free discovery call.