Regional WA delivering investors high capital growth but comes with risks

Regional Western Australia's high double-digit capital growth is attracting property investors from around the country, although prospective buyers do need to be aware of some potential pitfalls.

Hillside with houses in Albany, Western Australia
Some regional Western Australian property markets are among the strongest performers in the country, (Image source:

Some of the strongest property performers in Australia are being seen throughout regional Western Australia, with many seeing higher growth for the 12 months to March 2024 than Sydney and Melbourne.

According to CoreLogic, Sydney saw a median growth of 10.6 per cent for the 12-month period, Melbourne just 4 per cent and Canberra at just 1.6 per cent, while Bunbury in the southwest of WA had a staggering 18.5 per cent for the same year.

Perth has recorded 18.3 per cent growth for the 12 months, which is also an impressive result, however, the median price is now much higher than the regional locations that are performing just as well.

Perth’s median price is currently sitting at $687,000 whereas the regional hubs that have kept pace in terms of capital growth are sitting in the $300,000-$400,000 range, making them much more accessible to investors with lower budgets.

Some other regional markets in WA that have packed a punch include Manjimup, with a very affordable median price of $455,000 and 11.6 per cent growth, the Wheatbelt, which has had 11.5 per cent growth with a median price of just $364,400, while Margaret River has also seen strong gains with 11.4 per cent growth albeit with a much higher median price of $775,000.

Not all region property markets are equal

Investors do need to be more careful when investing regionally as some areas have been left behind, such as the Pilbara at just 2.4 per cent, and others have retracted.

Investing regionally can be fraught with danger.

Below are some key points all investors should follow before buying regionally.

1. Check your insurance costs before buying. Some areas attract higher insurance due to environmental impacts such as being cyclone prone.

2. Check the environmental overlays in the area to be sure you aren’t buying in a flood zone or bush fire area.

3. Check the rental vacancy rate and speak with local agents to ensure you will have strong tenant demand.

4. Bush blocks can be cheap but ensure there is an allowed building envelope. Some larger blocks or lifestyle farms do not allow a house to be built on them and this will hold back growth and suppress the value.

5. Buy in an area that is accessible to an airport and has an established commercial hub as well as medical and lifestyle amenities. This will support growth for the area and keep it sustainable.

Most importantly, don’t get caught up buying in a new suburb that has a lot of land supply and is a little too far out of town.

It can take a lot longer for supply to be absorbed in smaller towns than the metro areas. Oversupply will cripple your growth and increase rental vacancy periods.

Article Q&A

Which are the strongest performing regional WA property markets?

Bunbury had 12-month capital growth of 18.5 per cent, while Manjimup, with a very affordable median price of $455,000, had 11.6 per cent growth, the Wheatbelt region has had 11.5 per cent growth with a median price of just $364,400, while Margaret River delivered 11.4 per cent growth.

Are there risks associated with buying regional property?

Real estate investors should follow a few guidelines before buying regional property, including checking insurance costs, natural disaster and fire risks, rental vacancy rates, land supply and social and health support amenities.

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