Affordable regional markets are becoming Australia's hottest property play
New data shows regional property markets across two states in particular are outperforming the capitals, with affordable housing, tight rental supply and surging investor demand driving double-digit capital growth.
Australian regional property is outperforming the big cities and it’s the cheaper end of town doing the market’s heavy lifting.
Of the 20 fastest growing regional localities in terms of price growth, 17 are sitting at or below the national regional median value of $765,769.
The notable exceptions at the top of the annual capital growth list are Western Australia’s Bunbury, Busselton and Albany in positions three, four and six respectively.
Busselton (7.5 per cent) and Albany (7.2 per cent) also recorded the strongest quarterly gains nationally.
The meteoric price growth that has gripped the Perth market extends to Western Australian regions, with five of the top six hottest markets in the state, headed by the mining boom (and occasionally bust) town of Karratha.
Hottest regional property markets
| SUA name | State | Median value | Quarterly change | Annual change | Median days on market (12m) |
|---|---|---|---|---|---|
| Karratha | WA | $765,275 | 5.8% | 26.4% | 13 |
| Kalgoorlie - Boulder | WA | $463,860 | 4.8% | 23.1% | 15 |
| Bunbury | WA | $817,863 | 5.8% | 22.3% | 13 |
| Busselton | WA | $1,175,574 | 7.5% | 22.0% | 12 |
| Maryborough | QLD | $598,479 | 4.5% | 21.8% | 20 |
| Albany | WA | $802,805 | 7.2% | 21.7% | 10 |
| Emerald | QLD | $543,721 | 5.1% | 21.7% | 18 |
| Warwick | QLD | $618,082 | 3.4% | 21.1% | 27 |
| Toowoomba | QLD | $843,620 | 3.8% | 20.7% | 14 |
| Dubbo | NSW | $649,204 | 5.5% | 19.9% | 29 |
| Geraldton | WA | $607,498 | 6.8% | 19.8% | 15 |
| Kingaroy | QLD | $562,039 | 5.3% | 19.6% | 25 |
| Armidale | NSW | $591,347 | 4.2% | 19.5% | 47 |
| Wagga Wagga | NSW | $693,521 | 5.3% | 18.8% | 36 |
| Port Augusta | SA | $336,328 | 4.9% | 18.8% | 38 |
| Esperance | WA | $645,843 | 3.3% | 18.8% | 15 |
| Mount Gambier | SA | $571,576 | 3.9% | 18.3% | 40 |
| Bundaberg | QLD | $685,625 | 3.6% | 18.0% | 19 |
| Traralgon - Morwell | VIC | $527,235 | 3.9% | 17.5% | 50 |
| Port Hedland | WA | $547,846 | 6.9% | 17.4% | 19 |
Source: Cotality.
Among the 97 Significant Urban Areas (SUAs – which represent urban centres with population above 10,000), there were 58 that recorded double-digit annual growth according to newly released Cotality data.
Remarkably, of almost 100 localities not one recorded an annual price fall. Bowral-Mittagong came closest, with prices flatlining after having dropped 1.2 per cent over the last quarter.
Growth in regional Australian dwelling values has outpaced the capitals since November 2025. Regional dwelling values increased by 3.3 per cent in the three months to April, compared with a 1.1 per cent increase in the combined capitals over the same period.
Sellers in WA and Queensland were offloading properties without difficulty.
The median time on market in those states was 17 and 24 days respectively. Albany had the shortest time on market, with a median of just 10 days, followed by Busselton at 12 days. In total, there were 11 markets across these two states where time on market was below 20 days.
New South Wales regionals had some of the weakest selling conditions, with Batemans Bay (66.5 days), Bowral-Mittagong (65 days), Nelson Bay (60 days) and St Georges Basin-Sanctuary Point (59.5 days) having the longest median time on market. NSW had eight out of the 10 slowest selling markets, with the other two being in Victoria.
Lower-priced homes are hot property
Regional property markets are being driven by the quest for affordable homes. With capital city median values now topping the $1 million mark, buyers are being lured by a regional median $266,000 below that of the cities.
Kane Dury, Principal of Discover Buyers Agency, cited recent analysis showing that nearly half of all property investor enquiries in Australia target property priced under $700,000, yet homes at that price point make up only three in ten dwellings nationally.
“The recent data confirms that frustrated investors can’t find a home that matches their criteria.”
“Investors who understand where to look can still build meaningful wealth at this price point, provided they are willing to think beyond the capital city postcode.”
He said the obsession with capital cities was misplaced.
“The conversation about property has become so fixated on capital city medians that a huge cohort of everyday investors has been left with the impression that the door is closed.
“It is not closed. Successful long-term investors will be the ones who are strategic about where established housing fundamentals, such as population growth, tight rental supply, strong owner-occupier ratios, and multiple economic drivers, are doing the heavy lifting.”
The latest data from Cotality’s Regional Market Update reveals that while market momentum has shifted nationally, the easing across regional Australia has been far less severe than in the capital cities.
Three in five of the country’s 50 largest regional SUAs recorded a slower pace of growth this quarter, yet the regions continue to hold their lead as affordability drives buyer behaviour and supply issues remain.
Gerard Burg, Cotality’s Head of Research for Australia, said the results underscore the resilience of regional markets in the face of broader economic headwinds.
“We are seeing a clear loss of momentum at the national level, but regional markets are proving more resilient than their capital city counterparts,” Mr Burg said.
“Affordability remains a central driver, with internal migration patterns continuing to favour regional areas where buyers can find greater value and a different pace of life.”
Regional rents keep rising - everywhere
Regional rental markets continued to record solid growth in the three months to April, although the pace of increases slightly lagged the capital cities after regional areas had outperformed earlier in the year.
Regional rents rose 1.8 per cent over the quarter, up from 1.6 per cent in the previous three-month period, while combined capital city rents increased 2.1 per cent.
Among the 50 largest regional SUAs, only Bowral-Mittagong recorded a decline in median rents, slipping 0.5 per cent over the quarter. Albany posted the strongest rental growth, with rents rising 4.1 per cent, reflecting continued strong demand across south-west Western Australia. Burnie-Somerset and Launceston both recorded 3.9 per cent growth, while Orange rose 3.8 per cent.
On an annual basis, every major regional market recorded rental growth. Albany led the nation with annual rental growth of 15.2 per cent, followed by Launceston at 12.1 per cent and Devonport at 11.5 per cent.
Regional vacancy rates eased slightly in April to 1.9 per cent, compared with 1.8 per cent in January, although many markets remain extremely tight. Lismore continued to record the lowest vacancy rate nationally at just 0.4 per cent, down from 0.8 per cent earlier in the year.
Geraldton, Forster-Tuncurry, Albany, Warrnambool and Ballina all recorded vacancy rates of 1 per cent. At the other end of the spectrum, Gladstone recorded the highest vacancy rate at 3.5 per cent, followed by Hervey Bay at 3.1 per cent, Tamworth at 2.9 per cent and Mildura-Buronga at 2.8 per cent.
Gross rental yields remained steady between January and April at 4.2 per cent. While yields have generally softened over the longer term as dwelling values have outpaced rental growth, regional markets continue to offer stronger returns than the capital cities, where yields averaged 3.6 per cent in April.
Kalgoorlie-Boulder recorded the highest regional yield at 8.1 per cent, followed by Lismore at 5.3 per cent, Mackay at 5.2 per cent, Geraldton at 5.1 per cent and Taree at 5 per cent.
