ASX 200 dividend shares and real property are two of the most popular investment asset classes for building wealth in Australia.
But how do they compare on yields?
Given the astonishing rise in weekly rents over the past few years, it's worth taking a fresh look at how gross property rental yields compare to ASX 200 dividend yields.
Rental yields on Australian houses
Here are the gross rental yields of houses across the country.
| Market | Gross yield | Market | Gross yield |
| Sydney | 2.7% | Regional NSW | 4.1% |
| Melbourne | 3.2% | Regional VIC | 4.2% |
| Brisbane | 3.5% | Regional QLD | 4.3% |
| Adelaide | 3.5% | Regional SA | 4.6% |
| Perth | 4% | Regional WA | 5.8% |
| Hobart | 4.2% | Regional TAS | 4.4% |
| Darwin | 6.2% | Regional NT | 7.4% |
| Canberra | 3.7% |
Rental yields on apartments
Here are the gross rental yields of apartments across Australia.
| Market | Gross yield | Market | Gross yield |
| Sydney | 4% | Regional NSW | 4.4% |
| Melbourne | 4.7% | Regional VIC | 5% |
| Brisbane | 4.5% | Regional QLD | 4.7% |
| Adelaide | 4.7% | Regional SA | 5.6% |
| Perth | 5.5% | Regional WA | 8.5% |
| Hobart | 4.5% | Regional TAS | 5.1% |
| Darwin | 8% | Regional NT | n/a |
| Canberra | 5.1% |
Forecast yields for ASX 200 dividend shares in FY25
These are the forecast FY25 dividend yields for the top 10 ASX 200 shares by market capitalisation, as per CommSec data.
| Rank | ASX 200 dividend share | Forecast annual dividend in FY25 | Dividend yield |
| 1 | Commonwealth Bank of Australia (ASX: CBA) | $4.95 | 3.2% |
| 2 | BHP Group Ltd (ASX: BHP) | $1.73 | 4.3% |
| 3 | CSL Ltd (ASX: CSL) | $3.71 | 1.3% |
| 4 | National Australia Bank Ltd (ASX: NAB) | $1.72 | 4.4% |
| 5 | Westpac Banking Corp (ASX: WBC) | $1.55 | 4.7% |
| 6 | ANZ Group Holdings Ltd (ASX: ANZ) | $1.70 | 5.3% |
| 7 | Macquarie Group Ltd (ASX: MQG) | $6.50 | 2.8% |
| 8 | Wesfarmers Ltd (ASX: WES) | $1.98 | 2.8% |
| 9 | Goodman Group (ASX: GMG) | 30 cents | 0.8% |
| 10 | Fortescue Ltd (ASX: FMG) | $1.12 | 6.3% |
Rental growth slowing down
According to CoreLogic, rents across the country increased by 39% between August 2020 and June 2024.
Rising rents have been a significant contributor to Australia's high inflation in recent years.
This is partly due to their staggering increase and partly because rents have one of the largest weightings in the consumer price index (CPI) basket of goods and services used by the Australian Bureau of Statistics to measure the inflation rate.
But the rental market started to cool down this year.
The latest CoreLogic monthly report showed the annual rate of rental growth has slowed to 5.8%. That's the lowest it's been since April 2021.
CoreLogic Head of Australian Research, Eliza Owen, said rental growth was slowing due to lower immigration and a reversal of the household 'shrink' seen during COVID.
The 'shrink' refers to the fall in the average number of people living in each household during COVID.
This happened because more people sought to live alone during the pandemic. Working from home allowed many people to move away from the city where they could afford to rent solo.
Do ASX 200 dividend shares out-earn property?
As the tables above show, the answer to this question varies depending on the individual stocks and particular property markets you are comparing.
It's worth noting that franking credits add to the earnings of ASX 200 dividend shares.
By comparison, the holding costs of investment property, such as insurance and water, detract from rental earnings.
