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Property acquisition platform Buyers Agent has identified 10 regional hotspots based on investor activity – including sales and inquiries – over the past 12 months, alongside capital growth and rental yields.
According to Brisbane-based buyer’s agent Andrew Pizzino, Queensland and Western Australia are at the forefront of this trend, showcasing the fastest-growing regional markets.
“When analysing key property metrics like rental yields, vacancy rates, population growth, and demand in both rental and owner-occupied segments, it’s clear that regional investment markets in North Queensland and Western Australia are the most popular,” he said.
“Mandurah, in particular, remains a top investor hotspot. As Western Australia’s largest regional city, it’s steadily transitioning from a mining town to an affordable alternative to Perth.”
Pizzino said that Queensland’s appealing lifestyle is attracting buyers, further driving population growth in these affordable regions.
“Plus, the quality of properties at reasonable price points is generally quite high in the Sunshine State,” Pizzino said.
The surge in interest in regional areas has led to significant increases in property prices. Pizzino said that many regional properties are now listed without a price, complicating the buying process.
For instance, a property listed at $500,000 in Brisbane may sell for 10 per cent more, whereas in a hot regional market, the final sale price could be closer to 20 per cent above the listed price.
Sky Hammer, head of investment at Convergence Buyer’s Agents, identified housing affordability and limited supply as the primary drivers of the regional boom.
“In many regional markets in Queensland and Western Australia, buyers can still find four-bedroom homes on large blocks for under $550,000. As rents increase, more first home buyers are using government incentives to move from renting to owning,” he said.
Hammer cited a recent example in Townsville, where a three-bedroom house listed for offers over $400,000 received 30 written offers – most from first-time buyers – and sold for over $480,000.
He anticipates that demand will continue to rise as interest rates decline and borrowing power increases for many buyers.
Investing in regional markets presents several advantages, including strong rental yields, lower entry costs, and the opportunity to diversify investments across different states.
Many regional markets are still in the early stages of their capital growth cycles, offering potential for double-digit growth in the coming years.
“This growth allows investors to build equity, which can then be used for future deposits,” Hammer said.
“Rentvestors, particularly in cities like Melbourne and Sydney, are increasingly turning to regional markets as they often have substantial deposits saved but can’t afford properties in their home cities.
“By purchasing regional properties with stronger growth potential and solid rental yields, they can build equity more quickly and buy homes in their city faster than if they were only saving for a deposit.”
When identifying the best regional areas for long-term growth, short-term indicators such as days on market, inventory levels, and vacancy rates are useful. However, long-term growth depends on factors like infrastructure investment, building approvals, and economic diversification.
“When looking for short-term growth, we prioritise days on market as a key indicator due to its strong correlation with capital growth,” Hammer said.
“For example, we were buying in the Rockingham region southwest of Perth when days on market were around 50 in 2021. That figure is now around seven days on market and the market there has seen more than 70 per cent capital growth in just three years.”
To future-proof their investments in booming regional markets, buyers should understand local market trends and avoid jumping in too late in the capital growth cycle.
“Many investors wait until regional markets gain attention in the media before making a move. However, once you hear that a market has experienced 20 per cent capital growth in the past year, it’s typically already too late or not the ideal time to buy,” he said.
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