For Rhodes investors in 2026, new developments deliver higher depreciation deductions (up to $12K per year for the first 5 years), lower maintenance, and full statutory warranties; existing properties typically offer lower entry price, known rental history, and faster cash flow. New suits investors seeking maximum tax efficiency and capital growth; existing suits those prioritising immediate yield and proven rental performance.
9 min read | Rhodes Investment Advice | Last reviewed May 2026
For Rhodes investors in 2026, the new-versus-existing decision is rarely about yield alone. It is about depreciation deductions worth $5K to $10K per year, maintenance exposure that can double overnight via special levies, and the 2017 ATO rule that quietly removed a major tax benefit from existing apartment investment. This guide breaks the numbers down.
The Rhodes Investment Market in 2026
Rhodes (2138) sits in the City of Canada Bay LGA on the T9 Northern train line, 18 minutes from Wynyard. The suburb has become one of Sydney’s most active inner-west apartment markets, with roughly 6,000 apartments delivered since 2005, almost entirely through master-planned precincts on the foreshore. ABS census data shows around 75 percent of Rhodes residents rent, and the tenant base skews young (median age 32) with high incomes (top quartile household income).
That demand profile gives investors two distinct paths:
- New developments: off-the-plan or recently completed apartments, typically in active Billbergia precincts like Rhodes Central, Phoenix Apartments, and upcoming releases.
- Existing properties: apartments built between 2005 and 2020, sold by previous owners on the secondary market.
Both paths target the same tenant pool and produce broadly similar gross rental yields. The differences (and the investor decision) live in depreciation, maintenance, special levies, and the speed of the tenant turn.
Rental Yield: Gross and Net Comparison
Rhodes apartment rents in 2026 sit in clear bands by bedroom count and finish quality:
| Apartment Type | Weekly Rent (New) | Weekly Rent (Existing) | Gross Yield (New) | Gross Yield (Existing) |
|---|---|---|---|---|
| 1-bedroom | $620 to $680 | $560 to $620 | 4.2 to 4.5% | 4.0 to 4.3% |
| 2-bedroom | $780 to $880 | $720 to $820 | 4.0 to 4.4% | 3.8 to 4.2% |
| 3-bedroom | $1,050 to $1,300 | $950 to $1,150 | 3.8 to 4.2% | 3.6 to 4.0% |
Gross yield is broadly similar (3.6 to 4.5 percent across both segments) but the net picture diverges once you account for body corporate, council rates, property management, and maintenance.
Typical 2-bedroom net yield calculation in Rhodes (on $900,000 purchase, $810 weekly rent):
- Gross income: $42,120 per year
- Body corporate: $5,800 to $7,200 per year
- Council rates: $1,400 to $1,800 per year
- Water rates: $700 to $900 per year
- Property management (7 percent inc GST): $2,950 per year
- Insurance (apartment): $400 to $600 per year
- Maintenance new: $200 per year; existing: $1,800 per year (10 year old average)
- Net income: approximately $30,500 (new) vs $28,900 (existing)
- Net yield: 3.4 percent (new) vs 3.2 percent (existing)
After tax and depreciation, the gap widens significantly in favour of new builds. That gap is the depreciation story.
Depreciation: The 2017 ATO Rule That Changed Everything
From 9 May 2017, the ATO restricted plant and equipment depreciation on second-hand residential property under the Treasury Laws Amendment (Housing Tax Integrity) Act 2017. The rule sits at the core of any new-versus-existing investment analysis in Rhodes.
What investors can claim:
- New apartment (purchased after 9 May 2017): capital works deduction at 2.5 percent per year for 40 years on the construction cost, plus plant and equipment depreciation on appliances, carpets, blinds, hot water systems and similar items at ATO effective lives.
- Existing apartment (purchased after 9 May 2017): capital works deduction only; no plant and equipment depreciation on items installed by a previous owner.
Typical 5-year depreciation comparison (Rhodes 2-bedroom, $900K purchase):
| Year | New Apartment | Existing Apartment |
|---|---|---|
| Year 1 | $11,500 | $3,200 |
| Year 2 | $10,200 | $3,200 |
| Year 3 | $9,100 | $3,200 |
| Year 4 | $8,200 | $3,200 |
| Year 5 | $7,400 | $3,200 |
| 5-year total | $46,400 | $16,000 |
At a 39 percent marginal tax rate, that is around $18,100 in tax saved on new versus $6,240 on existing over 5 years; an $11,860 cash flow advantage. Always engage a quantity surveyor for a property-specific schedule under section 40 of the Income Tax Assessment Act 1997.
Maintenance and Special Levy Exposure
Maintenance and special levies are the volatility in apartment investment returns. New builds and existing properties carry materially different risk profiles.
New developments:
- Statutory defects period: 6 years for major defects, 2 years for minor under Home Building Act 1989 (NSW).
- Design and Building Practitioners Act 2020 adds further developer accountability post-completion.
- Typical maintenance year 1 to 5: $0 to $500 per year (most issues covered by warranty).
- Strata levies stable and known at handover.
- Special levy risk: low for 5 to 7 years post-completion.
Existing properties:
- Statutory warranties exhausted (if originally built before 2020 reforms, no DBP Act protection).
- Typical maintenance: $1,500 to $3,000 per year for a 10 to 15 year old apartment, more for hot water systems, air-conditioning, appliance replacements.
- Special levy risk: highest in buildings 10 to 25 years old, when major capital works (waterproofing, facade, lift renewals) come due.
- The strata report is the single most important due diligence document; reveals sinking fund balance, dispute history, planned works.
A real-world example: a 12-year-old Rhodes apartment building announcing a $25,000 per apartment special levy for facade remediation can wipe out 2 to 3 years of net rental income overnight. New builds in iCIRT-rated precincts have much lower exposure to this risk profile.
Capital Growth and Tenant Demand
Long-term capital growth in Rhodes runs 5 to 7 percent per annum across the apartment market, with cyclical variation. Both new and existing apartments participate in suburb-wide growth, but with different curves.
New apartments enter the market at a 5 to 10 percent premium to comparable existing stock. The premium typically narrows in years 3 to 5 as the apartment ages. Investors who buy new and hold 10+ years generally outperform the suburb median because:
- The depreciation tax shield boosts net cash flow during the early years, allowing higher gearing or faster debt reduction.
- Lower maintenance preserves capital that would otherwise leak to repairs.
- iCIRT-rated buildings consistently re-sell at a premium to unrated stock in the same suburb.
Tenant demand is broadly similar between new and existing in Rhodes (vacancy rates of 1.5 to 2.0 percent across the suburb), but new apartments lease 7 to 14 days faster on average. For a property at $810 weekly rent, that is $810 to $1,620 in faster cash flow at every tenancy change.
For investors with a 7+ year horizon and a marginal tax rate above 32.5 percent, new development apartments in Rhodes deliver a measurably higher after-tax return than equivalent existing stock. The depreciation advantage and lower maintenance compound over time, especially in master-planned iCIRT-rated precincts where capital growth tracks at the top of the suburb’s range.
Side-by-Side Investor Comparison Table
| Factor | New Development | Existing Property |
|---|---|---|
| Entry price | 5 to 10% premium | Lower headline |
| Stamp duty (FHBAS) | Higher thresholds ($800K full) | Lower ($650K full) |
| Depreciation (yr 1) | ~$11,500 on $900K 2-bed | ~$3,200 on $900K 2-bed |
| Gross yield | 3.8 to 4.5% | 3.6 to 4.3% |
| Net yield (pre-tax) | ~3.4% | ~3.2% |
| Maintenance yr 1-5 | $0 to $500/yr | $1,500 to $3,000/yr |
| Statutory warranties | DBP Act 2020 + Home Building Act | Depends on age |
| Special levy risk | Low (5 to 7 yrs) | Moderate to high (10+ yrs) |
| Tenant lease time | 7 to 14 days | 14 to 28 days |
| Capital growth | Tracks top of suburb range | Tracks suburb median |
| Cash flow start | Post-settlement (or post-completion if off-the-plan) | Post-settlement (6 to 12 weeks) |
Which Suits Which Investor
The choice between new and existing depends on three factors specific to the investor, not the property.
New development suits investors who:
- Have a marginal tax rate above 32.5 percent (depreciation deductions are worth more at higher tax brackets).
- Plan to hold 7+ years (the compounding effect of higher net cash flow becomes meaningful).
- Prefer predictable maintenance and want statutory warranty protection.
- Are comfortable with off-the-plan settlement timing (or are buying completed new stock).
Existing property suits investors who:
- Need immediate rental cash flow (existing settles in 6 to 12 weeks).
- Want to verify rental yield with actual current lease rates.
- Have done deep strata-report due diligence and accept the higher maintenance and special levy variance.
- Find genuinely under-priced stock (rare in Rhodes, where the market is well-priced).
Billbergia delivers across this spectrum in Rhodes; both completed new stock with 6-week settlement and off-the-plan releases with 2027 to 2028 completion. The 4.5 Gold iCIRT rating and 6,000 apartments delivered since 1988 provide the developer-track-record signal that reduces the construction-risk premium investors otherwise apply to new builds. See apartment investment tips for Rhodes for further considerations.
Frequently Asked Questions
New apartments offer materially higher depreciation. A new Rhodes 2-bedroom can claim $8,000 to $12,000 per year in depreciation across the first 5 years (capital works at 2.5 percent of construction plus plant and equipment on appliances and fixtures). Existing apartments purchased after 9 May 2017 lose plant and equipment depreciation under ATO rules; only capital works on the building shell remains, typically $2,500 to $4,000 per year.
Rental yields are similar (3.5 to 4.5 percent gross) but new builds typically lease faster (under 14 days vs 21 to 28 days for older stock) and at the top of the suburb’s range. After accounting for lower maintenance and higher depreciation deductions, the net after-tax yield on new is generally 0.5 to 1.0 percentage points higher than on comparable existing stock.
New builds from reputable Sydney developers typically require minimal maintenance in the first 5 to 7 years: $0 to $500 per year for the apartment plus a defects period where major issues are remedied at developer cost under the Design and Building Practitioners Act 2020. Older Rhodes apartments (pre-2015) average $1,500 to $3,000 per year in repairs plus exposure to special levies for building-wide works.
Long-term capital growth in Rhodes runs 5 to 7 percent per annum across the apartment market regardless of build year. New apartments enter the market at a small premium (5 to 10 percent over equivalent existing stock) but the premium typically narrows in years 3 to 5. New stock from iCIRT-rated developers like Billbergia tends to hold value better than unrated competitor stock through market cycles.
Strata levies on new buildings are predictable for 2 to 5 years post-completion (typically $1,200 to $1,800 per quarter for a 2-bedroom in a Rhodes precinct with full amenity). Existing buildings may have lower base levies but carry special levy risk: a building-wide remediation can add $5,000 to $50,000 per apartment with limited notice. The strata report is the single most important due diligence item for existing apartment investment.
From 9 May 2017, the ATO restricted plant and equipment depreciation on second-hand residential property. Investors buying existing apartments can no longer claim depreciation on existing appliances, carpets, blinds and similar items (typically $3,000 to $6,000 per year). Capital works deductions on the building shell remain, but the loss of plant and equipment depreciation is the biggest single tax disadvantage of buying existing for investment.
New stock leases fastest because Rhodes tenants (predominantly young professionals working in the CBD, Macquarie Park or North Shore) prefer modern finishes, in-building amenity (pool, gym, concierge), and near-new appliances. The Rhodes vacancy rate sits at around 1.5 to 2.0 percent across the suburb, but new apartments consistently lease 7 to 14 days faster than equivalent existing stock at the same rent point.
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Invest in a Rhodes new development with Billbergia
From completed Phoenix Apartments stock with 6-week settlement to off-the-plan releases with 2027 to 2028 completion in Rhodes Central, Billbergia delivers the new-build investment grade across the precinct. iCIRT 4.5 Gold rated; 6,000+ apartments delivered since 1988.
This article is general information only and does not constitute financial, investment, or tax advice. Depreciation figures are indicative; actual deductions depend on individual property characteristics and a quantity surveyor schedule prepared under section 40 of the Income Tax Assessment Act 1997. Yield, rent, and price ranges reflect typical Rhodes apartment market conditions in 2026 and will vary by individual property. Speak to a licensed financial adviser, tax accountant, and quantity surveyor for guidance specific to your investment. Information current as of May 2026; sources include the Australian Taxation Office, CoreLogic, NSW Land Registry Services, Australian Bureau of Statistics, and the NSW Strata Commissioner’s office.
