General rule has been a 5% gross return on rental properties
again in the early 90's in perth that basic home worth about $120K could be rented for about $120 per week or $6240 a year. Very affordable on an average wage of $35K. About 18% of the annual wage and giving the opportunity to save $5 to $10K so the renter could become a buyer
The same basic property now worth $400 to $450K is now renting out for about $300 per week or close to $16K per year. Lower than the historical 5% gross return. But on an average annual wage of about $55K it is 28% of that annual wage. With the other costs of living taken into account and the fact at least $40K is needed if you want a reasonable deposit, the chances of moving from renter to owner are a lot harder
