I am not disputing the mathematical equation used to calculate rental yields (periodic cashflow in comparison to total value of the investment) but I think the whole concept of yield in the context of property investment just doesn't make sense. Why? Rental yield on its own means nothing for a RE investor unless you take your cost of investing/borrowing/expenses into account. Everyone talks about low yields these days without realizing that interest rates are also very low. A 4% yield may be excellent if you get an investor loan at 3.75% but a 7% yield could be bad if interest rates go up to 8% lets say. As investors, a lot of success depends on 'difference between your holding costs and your income from the asset being held'. Hence instead of rental yields figures being highlighted by economists to draw all sorts of conclusions, they should just report 'average yield margins'. yield margin = yield on your original investment - current interest rate regardless of market cycle if you are getting a positive yield margin on a property, you are doing yourself a lot of good and the only exception should be when you are looking for a negative yield margin for negative gearing purposes. What does everyone else thinks?