New study reveals top 200 Australian suburbs for property investment
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Photo by Lara Jameson
In a groundbreaking study, PropTrack has unveiled a list of the top 200 suburbs in Australia for property investment, with Queensland (Qld) and Western Australia (WA) emerging as the clear leaders. The report, which evaluates suburbs based on rental yield, 12-month value growth, and the average number of days it takes to lease a vacant property, highlights the potential for lucrative returns in these regions.
Queensland dominated the list with 98 suburbs, while Western Australia followed closely with 72. South Australia came in third with 17 suburbs, trailed by New South Wales (NSW) with seven, the Northern Territory (NT) with four, and Victoria (VIC) with just two.
Spalding in WA claimed the top spot on the list. With a median house price of $398,000, Spalding offers investors a 7 per cent rental yield and has experienced a remarkable 38 per cent growth in property value over the past year. Properties in Spalding are typically tenanted within 22 days on the market. Following closely is Rockhampton City in Qld, which boasts a 35 per cent annual growth rate, bringing its median house price to $375,000. Properties in Rockhampton City are rented out after an average of 18 days and offer a gross yield of 6 per cent.
Angus Moore, a senior economist at REA Group, provided insights into the findings. “Regional, or outer suburban suburbs featured most strongly in the data,” Moore noted. “It’s not universal, but it is a theme. One, regional areas often carry higher rental yields. And two, those areas have also seen stronger price growth over the past 12 months, but you could even extend that back to the past five years.”
Moore further explained that these regions have experienced robust growth since 2020, making them attractive to investors. “Those sort of more affordable, more outlying areas have seen really strong growth on average since 2020, and that’s why they’re showing up in these sorts of lists,” he added.
The report highlights that regional and city fringe suburbs often have “thinner rental markets,” according to Moore. “There’s just not as much supply and availability as the inner city, where you have a deeper rental market that historically can carry some risk of properties sitting vacant, and so you see higher yields to compensate,” he said. However, recent years have seen a shift in this trend, with regional rental markets experiencing extremely tight conditions. “We’ve also seen very strong demand for regional and outer suburban homes, both to rent and to buy, and that’s driven up rents a lot in those areas,” Moore explained.
The dominance of Qld and WA in the list is attributed to several factors. Moore pointed out that the growth of these markets over the past year contributes significantly to their representation. “Regional Queensland is still solid, even if growth is slower this year and they’re also extremely tight rental markets,” he said. “These areas have seen extraordinarily low rental vacancy rates and commensurately very strong growth in rents over that period. So that continues to make them attractive to investors.”
Interstate migration patterns have also played a role in shaping the property investment landscape. Moore observed that families priced out of NSW and Victoria have largely migrated to Queensland. This movement has contributed to the state’s strong rental demand and growth. “Interstate migration had favoured some states, with families priced out of NSW and Victoria largely heading to Qld,” Moore noted.
The study’s findings underscore the potential for investors to capitalise on the growth and demand in regional and outer suburban areas. As rental markets tighten and property values rise, these suburbs present promising opportunities for those looking to invest in Australian real estate.