Where smart investors are buying in 2026: the suburbs and states set to outperform

Australian property markets are settling into a new rhythm.

The uncertainty from recent economic cycles has settled, the dust of which came from the speculation on interest rates rises and media’s focus on affordability pressures.

But what we are already seeing as the property markets wake up to the new year, is that 2026 is going to paint a very different picture than previous years, why? — it’s the profile of the modern property investor. Investors are becoming more savvy, sophisticated, and have modern advances with newfound tech at their side – and the results are flowing.

We expect 2026 to reward disciplined, fundamentals-driven strategies, as opposed to speculative momentum plays.

Top five trends to watch this year

Regional resilience

Quality regional markets will become core portfolio picks due to a post pandemic-driven regional boom toward lifestyle and affordability.

Data-driven sourcing and predictive analytics

Decisions are made using advanced data and Artificial Intelligence (AI) created Analytics.

Access to better data and predictive analytics has shifted the competitive advantage for investors who know how to read and act on signals before prices reflect them.

Hybrid strategies, yield plus capital growth

Investment strategies are becoming more hybrid, as investors are no longer “just” searching for a long-term capital growth property, or a high cashflow property.

Investors are employing experts in exchange for quicker returns and to build their portfolio faster.

Energy efficiency as value drivers

Investors who are environmentally conscious, are seeing the benefits of properties that are energy efficient and environmentally aware.

Environmental efficiency is no longer just a box-tick — it’s a value driver.

Financing sophistication and capital structure innovation

Brokers are becoming increasingly sophisticated in the way they can structure finance for investors.

Investors who may have been priced out of the market in recent years, or serviceability isn’t as high as they require, are now putting heavy reliance on brokers to create a sophisticated capital finance structure so they are able to continue investing and growing wealth.

Around the states

New South Wales

Sydney: Sydney is expected to continue rising in 2026 with annual increases likely to land around 5 per cent-6 per cent (houses) by the end of the year. Because inflation is not yet under control, interest rate rises will not be a surprise. With housing supply will remain tight, prices should continue steadily increasing but we aren’t likely to see any markets suddenly boom or have major leaps.

Haberfield and Dulwich Hill in Sydney’s innerwest are top picks for suburbs close to the CBD due to their increased connectivity from the light rail, as well as their gentrification with many diverse cultural restaurants and cafés. These suburbs are top picks for families as it is increasingly common in our modern day for both parents to be working so family homes close to the CBD are limited and can achieve top dollar.

Further out from the CBD, thriving suburbs will be those that are well connected to infrastructure projects such as Oran Park and Leppington, which are close to the Western Sydney International Airport development. Oran Park has already seen a 2.41 per cent quarterly increase and Leppington 1.8 per cent quarterly increase. Leppington has outperformed the averages with a 17.67 per cent 10-year average annual growth rate (February 2026: ABS data), but the question would bare whether this suburb has run out of its steam now.

Areas experiencing high demand for housing and infrastructure, with significant growth seen in Marsden Park, St Marys, and Penrith from significant business investment and infrastructure upgrades. Marsden Park homes have now reached a median price of $1.2million which has resulted from 6 per cent annual growth (February 2026: ABS data).

Regional: Look south of Sydney and consider quaint charming towns like Milton, Berry, and Gerringong as popular choices. Milton has seen a steady rise over the past 12 months with a 11.62 per cent annual growth in past 12 months. (February 2026: ABS data).

 If you’re looking for a luxury home, Kiama shines as the ultimate luxury front-runner.

For investors and home buyers, value can be found in affordable beach side suburbs like Sanctuary Point, Ulladulla, Bateman’s Bay where we are likely to see the solid growth in family sized properties, but family homes are still in the ‘affordable’ range with median prices being Sanctuary Point ($700,000), Ulladulla ($890,000), Bateman’s Bay ($750,000).

Queensland

Brisbane: The 2032 Olympics-related infrastructure boom will continue to attract investors, but this really comes as no surprise as Brisbane is fuelled by population growth and more affordable housing opportunities.

The Queensland Government has forecasted that by 2046 an additional 500,000 people are to move into the Brisbane City Council area alone, increasing the population to 1,721,000 and a total of 2.2 million people to call south-east Queensland home projecting the population to reach 6 million people by 2046.

I am keeping a keen eye on the Brisbane suburbs of Manly, Deception Bay, Mount Gravatt. Deception Bay is often highlighted as a top affordable suburb, it has shown substantial capital growth because it offers attractive, consistent returns for investors with high rental demand and an average of only 17 days on the market. While Mount Gravatt and Manly benefit from infrastructure and high demand from families and commuters. 

Regional: Noosa and Noosa Heads (15 per cent increase 10-year average annual growth rate), which is well above the averages. Noosa has proven to be a top contender for “Hippy-chic popularity” to rival Byron Bay due to the’ Celebrity effect’ both towns have. Noosa has long been a sought-after, affluent destination attracting numerous high-profile residents and property investors seeking a luxurious coastal lifestyle. Famous names linked to property ownership or residence in the area include F1 driver Mark Webber, businessman Richard Branson, and media personalities such as Karl Stefanovic. 

Baringa on the Sunshine Coast is a great contender. It is located in a region shifting from a holiday market to a diverse, high-growth area, with significant investment in health, education, and jobs. It has shown an 8.23 per cent 12-month growth (source: February 2026 ABS Data).

Victoria

Melbourne: Melbourne is currently in the spotlight for many investors after being a weak performer with sluggish growth in recent years. Investors are hoping for Melbourne to start making a recovery in 2026, with long-term investing in mind.

The previous oversupply of properties created a flooded market, but demand is slowly catching up.

Around the CBD, consider suburbs like Coburg due to the inner-north demand, and Cranbourne/Packenham being in a growth corridor as well as consider West Melbourne/Box Hill due to infrastructure like the Metro Tunnel.

Regional: Geelong has a great blend of lifestyle, strong infrastructure, and connectivity to Melbourne. It is is currently undergoing significant infrastructure development to support a population projected to reach 500,000, focusing on upgrading transport, health, and urban spaces.

Werribee and Clyde North are showing a lot of potential due to new infrastructure; amenities and these suburbs have shown consistent long-term demand for housing.

These areas are great for investors with lower budgets with the median house price in Werribee sitting at $630,000 with 4.40 per cent average annual growth and Clyde North median house price at $737,500 and 4.21 per cent average annual growth. These are long term investments.

Western Australia

Perth: After going through a period of ‘frenzied growth’ in recent years, many experts are worried that the Perth market is flooded with too many investors, however we believe Perth to be entering a more sustainable, yet still strong, phase. The reason being that Perth remains a top-performing market in Australia, supported by chronic low supply and increasing demand.

In 2026, the best suburbs for investment have shown annual price increases and are projected to maintain momentum due to high demand and scarcity in the market. 

The suburb of Bateman led growth in 2025 with a 24.27 per cent annual increase (Source: February 2026 ABS Data) and 6.02 per cent quarterly growth in February 2026. However, it is not the most affordable for investors with the median price sitting at $1.365m.

On the outskirts of Perth, 40min drive south of the CBD is Wellard. The median price is more affordable at $690,000. The 12-month growth is 8.67 per cent and rental yields are around 5 per cent giving both some strong returns and capital growth prospects for investors.

Regional: Repeating its appearance as one of our top picks is Geraldton due to its affordability, with its median house prices $473,000 increasing a staggering 24.47 per cent since prior year and a 10-year average annual growth rate of 12.29 per cent (source: ABS Data, February 2026). Not only that, but it brings excellent rental returns with gross rental yields of 5.5 per cent-6 per cent.

South Australia

Adelaide: Adelaide’s property market has been a strong performer, driven by high demand, undersupply, and projected capital growth (10-14 per cent predicted) outperforming the national average. It is popular for investors because of its relative affordability compared to Sydney and Melbourne, Adelaide offers more accessible entry points for investors.

Walkerville is a top choice for apartments. It is an affluent inner-city suburb with houses achieving upwards of $2 million, however the apartment market is much more affordable with median prices of $490,000, current quarterly growth of 6.52 per cent and rental yields of around 5 per cent. (source: ABS data February 2026).

Investors enjoy the strong rental returns of suburbs like Eyre (located north of Adelaide CBD), achieving yields of upwards of 5 per cent on a median house price of $600,000. The 12-month growth in Eyre for houses has been strong with a 15.77 per cent 12-month growth which strongly outweighs the national average. The house price is an attractive entry level for some investors.

Regional: Also making our top list in 2025, Port Lincoln is again on our top pick in 2026. It has shown strong growth due to its increased demand.

The median house price is affordable at $500,000 which is a 10.86 per cent increase from prior year and has strong rental yields upwards of 5 per cent. Port Lincoln’s 10-year average annual growth rate is 11.36 per cent showing investors that there is long term capital growth potential (source: ABS February 2026). Port Lincoln makes a great investment because it lies at the southernmost tip of South Australia’s picturesque Eyre Peninsula. It is a major fishing town but it also home to 50 per cent of the States wheat, barley, and oil seed production and a total $3.2 billion worth of exports are sent to domestic and international markets per year.

The Government has strong investment to transform Port Lincoln with the new Lincoln Cove marina, a $290 million renewable energy power project, and a $300 million mixed-use project including a new base for the local fishing fleet.