Where to buy an investment property: Cheap, desirable suburbs where you should be buying

A new report has revealed where property investors wanting to build wealth without splurging in the current climate of high interest rates should be buying property.

Property investors wanting to build wealth without splurging in the current climate of high interest rates may be better off ditching Sydney and turning to regional Australia, a new report shows.

The Hotspotting research identified the top “affordable lifestyle” locations with the best upside potential for investors, revealing most were in regional Queensland, Western Australia and South Australia.

Lifestyle locations were defined as those with a high level of infrastructure, both planned and existing, and proximity to major job nodes.

These attributes meant the areas were popular with cashed up tenants and long-term vacancies were rare.

They were also attracting new home buyers and the rising sales volumes meant there was potential for the local properties to soon rise in value, according to the Hotspotting report.

A view of the city of Port Lincoln.

The top 10 locations included Toowoomba, Yeppoon and Townsville in Queensland, along with Geraldton and Bunbury in Western Australia.

Other top areas were the Southern Moreton Bay Islands region near Brisbane and South Australian suburbs Mt Gambier, Murray Bridge and Port Lincoln.

The Mitchell Shire area was the only region flagged in Victoria, while no NSW locations with suitable infrastructure were deemed affordable enough to make the list.

Hotspotting director Terry Ryder said many of these areas were benefiting from an influx of families coming from pricier capital cities like Sydney and Melbourne in search of better value housing.

“This big migration of population has been caused by the pursuit of lifestyle and affordability, enabled by technology – the ability to work remotely,” he said.

Properties in Yeppoon are usually priced around $500,000.

“The result for regional property markets has been extraordinary, leading to strong demand and price growth in many areas.

“And now, at a time when some markets are declining from the boomtime peak levels, the regional markets overall are showing the strongest resistance to the downturn trend, which is why we believe that the ‘Exodus to Affordable Lifestyle’ trend will continue.”

TOOWOOMBA, QLD

Toowoomba was particularly well placed to benefit because of its inclusion in Brisbane’s successful 2032 Olympics bid, $12 billion economy and building of a $15 billion inland rail link, according to Hotspotting. Local properties ranged from about $340,000-$580,000.

YEPPOON, QLD

Yeppoon was singled out due to $3 billion in alternative energy projects in the surrounding area, a $1.1 billion ring road to nearby Rockhampton, a revitalised foreshore and median prices near $500,000.

GERALDTON, WA

Mr Ryder said Geraldton in the state’s mid-west was a key regional centre that has grown

swiftly in recent years, in line with growth in Perth and the state overall. “As the Perth property market rebounded strongly in 2020 and delivered notable growth in 2021 and 2022, so, too, did the municipality of Geraldton, four hours’ north of the capital city,” Mr Ryder said. Geraldton prices ranged from $340,000-$500,000.

MT GAMBIER, SA

Mr Ryder said Mount Gambier is rated one of the best regional centres in South Australia for property investment. It offers affordable housing, lifestyle opportunities and employment growth in a vibrant regional economy, he said. Mt Gambier house prices were typically $365,000. Units averaged $240,000.

BUNBURY, WA

Bunbury is the commercial heart of Western Australia’s booming south-west region. Dubbed the second capital of the state, Bunbury features one of the country’s biggest regional ports, Mr Ryder said. “When combined with its major industrial estates and strong transport links to mining and agricultural regions, it makes a formidable employment node,” Mr Ryder said. Bunbury prices ranged from $280,000-$620,000.

TOWNSVILLE, QLD

“Numerous large projects supported by public and private investment of around $11 billion are either under way or in the pipeline, which include projects in defence, transport, tourism, energy and education,” Mr Ryder said. “Another boost is coming from the massive Carmichael Coal Mine which has its headquarters in Townsville.”

MITCHELL SHIRE, VIC

Mr Ryder said the Mitchell Shire market continues to demonstrate strong growth in median house prices, boosted by its proximity to Melbourne and the growing demand for affordable lifestyle locations within commuting distance of the capital city’s employment nodes.

PORT LINCOLN, SA

With the Exodus to Affordable Lifestyle trend a strong factor, homebuyers are starting to see the town as a more long-term prospect, Mr Ryder said. “The Eyre Peninsula’s economy is diverse, with representation in manufacturing, mining, aquaculture, commercial wild catch fishing, agriculture, industry research, food and tourism.”

Originally published as Where to buy an investment property: Cheap, desirable suburbs where you should be buying