Investing in property within Australia’s regional towns offers a compelling alternative to the capital city markets, especially for those seeking affordability, higher rental yields, and lifestyle benefits.
As the price of property in Australian capital cities keeps rising, many property buyers are seeking to invest in regional towns. Also, many home buyers are opting to “rentvest” (whereby they live in the city but invest in property regionally) to get their foothold on the property ladder.
There are many persuasive arguments to influence buying regionally, one of the biggest being that the prices in regional towns seem too good to be true however, if it comes with a catch. If you’re looking at purchasing a property in an area that you don’t know well, this will require careful planning and due diligence.
Key Differences: Regional Towns vs. Capital Cities
- Affordability: Regional properties often have lower entry prices, making them accessible for a wider range of investors, especially those priced out of the capital cities.
- Rental Yields: Regional areas can offer higher rental yields due to lower property prices and steady demand.
- Market Volatility: Capital cities may experience more consistent growth, while regional markets can be more volatile, influenced by local economic factors. This is where the largest risk lies. It is important that you only invest into regional towns with multiple growth drivers to mitigate this risk.
- Infrastructure and Amenities: Capital cities typically have more developed infrastructure and amenities compared to regional towns. It is important to assess the liveability of the town you’re investing in. Consider whether there is a hospital, University, Bus network, job prospects, etc.
- Tenant Demographics: Regional areas may attract different tenant profiles, such as retirees, seasonal workers, or students, depending on the town’s characteristics. There is also usually a higher number of lower socio-economic tenants and housing commission tenants circulating the rental markets in regional areas due to the lower price points.
How to Buy a Property in a Regional Town:
- Engage a Buyers’ Agent:A Buyers’ Agent who is familiar with the area can provide invaluable insight and save you a lot of time and money from having to do all the research and due diligence yourself. They can also help you to avoid making a costly mistake.
- Engage Local Professionals: Partner with a reputable local real estate agent and property manager who understand the nuances of the specific regional market.
- Conduct Thorough Research: Investigate the town’s economic drivers, population trends, infrastructure developments, and employment opportunities. Some regional towns may have a higher crime rate in some areas, or an area that has a high percentage of housing commission tenants. It is important that you can identify the “good end” of town from the “bad end” of town as this will impact your future capital growth.
- Understand Demographics: It is important you understand the type of property is in demand in the area. It is not about getting the biggest property for your money, but the right property for the demographics. For example, if you’re buying into an area that is dominated by university students, buying a 5-bedroom property wouldn’t be in demand as much as a one- or two-bedroom unit. Same goes for family orientated areas. Families would demand 3 bedrooms or more property, so a 2-bedroom townhouse would be less favourable.
- Utilise Technology: Leverage virtual tours, video calls, and online property listings to assess properties remotely as it will be both costly and timely to do inspections regionally.
- Inspect the Property: If possible, visit the property in person. If not, consider hiring a local inspector to provide a detailed report.
- Understand Local Regulations: Familiarise yourself with local council regulations, zoning laws, and any restrictions that may affect your investment.
- Assess Rental Demand: Evaluate the demand for rental properties in the area to ensure consistent rental income.
- Plan for Property Management: Since you’re not local, a reliable property manager is crucial for handling day-to-day operations and tenant relations.
Benefits of Buying in a Regional Town
- Affordability: Lower property prices allow for smaller mortgages and potentially higher returns on investment.
- Higher Rental Yields: Regional properties often offer better rental yields compared to capital cities.
- Lifestyle Appeal: Many regional towns offer a relaxed lifestyle, attracting tenants seeking a change from city living.
- Government Incentives: Some regional areas may offer incentives for investors or first-home buyers.
- Growth Potential: Emerging regional markets can provide significant capital growth opportunities.
Risks of Buying in a Regional Town
- Economic Dependence: Some towns rely heavily on a single industry (e.g., mining, agriculture), making them vulnerable to economic downturns.
- Limited Liquidity: Selling a property in a regional area may take longer due to a smaller buyer pool.
- Infrastructure Limitations: Lack of public transport, healthcare facilities, or schools can affect property desirability.
- Natural Disasters: Certain regions may be prone to floods, bushfires, or other natural events, impacting property value and insurance costs.
- Population Decline: Some towns may experience declining populations, reducing demand for housing.
Top Regional Towns for Investment in 2025
New South Wales: Orange
- Average Purchase Price: $684,500
- Gross rental yield: Approximately 4.58%
- 10-year Average Annual Growth Rate: 10%- Steady growth supported by infrastructure development and a diverse economy
Orange, NSW offers a blend of affordability, strong rental yields, and significant infrastructure developments. Orange is quite an affordable investment with the average purchase price under $700 000 (as of June 2025), and rental yields are attractive. The rental vacancy rate of 1.6% is lower than Sydney’s which highlights the strong rental demand and tight housing market in Orange. Some of the main infrastructure projects in Orange include the Redmond Place Development which is a 330-home precinct including 20% affordable housing options. The Leeds Parade Subdivision is a 46 Lot housing estate near the city centre, aimed to address the area’s housing undersupply. The main economy in Orange is healthcare, education, agriculture, and Tourism. The council is focusing on roads and transport upgrades, enhancing community facilities like parks and sporting fields, as well as the arts and cultural experiences in the area.
Queensland: Rainbow Beach
- Average Purchase Price: $856,500
- Gross rental yield: Approximately 4.31%
- 10-year Average Annual Growth Rate: 11.46%
Under $1million is hard to find in this beautiful region of Queensland. Rainbow Beach is a standout for value, considering an hour south is Noosa Heads with an average purchase price upwards of $2.3million. Rainbow Beach has all the small beachside town charm but is still very accessible to all the busy tourist hotspots. Even the middle of the Sunshine Coast is accessible for a day trip from Rainbow Beach. Properties in the area spend an average of 28 days on the market, indicating steady demand. While Rainbow Beach offers promising investment prospects, potential investors should consider factors such as the town’s reliance on tourism, which can be subject to seasonal fluctuations, and the limited availability of properties, which may affect liquidity.
Victoria: Bendigo
- Average Purchase Price: Approximately $615,000
- Gross rental yield: Approximately 4.34%
- 10-year Average Annual Growth Rate: 8.32%
Bendigo is a regional city with a diversified economy and strong rental yields. Recent investor activity has shown significant returns; for instance, a $450,000 property underwent a $70,000 renovation and increased in value to $650,000 in just eight weeks. Bendigo offers a diverse range of industry for employment and economic drivers such as Healthcare and social assistance, manufacturing, construction, retail, education (La Trobe University and Bendigo TAFE), financial services, tourism, and cultural heritage (Bendigo Art Gallery) and heritage architecture.
Western Australia: Bunbury
- Average Purchase Price: $700,000
- Gross rental yield: Approximately 4.94%
- 10-year Average Annual Growth Rate: 7.84%
Bunbury, located in Western Australia’s southwest, has emerged as a compelling destination for property investors. Its recent market performance, combined with strong rental yields and economic growth, positions it as one of the top-performing regional markets in the state. Bunbury has demonstrated significant capital growth over the past year. According to the Real Estate Institute of Western Australia (REIWA), the median house price in Bunbury rose by 14.6% over the year, making it the state’s second-best performer. However, you must research this area carefully and decide whether you may have already missed the opportunity in this one given the high growth over the past year. As a major regional centre, it boasts robust employment opportunities, quality medical facilities, and reputable schools. Its coastal location offers a desirable lifestyle, attracting both residents and investors. The city’s infrastructure and amenities contribute to its liveability, making it an attractive option for those seeking a balance between urban conveniences and a relaxed coastal lifestyle.
Invest with Caution
Investing in regional Australian towns can be a rewarding strategy when approached with careful planning and research. By understanding the unique dynamics of regional markets, assessing risks and benefits, and selecting towns with strong economic foundations, you may be able to build a diversified and potentially high-performing property portfolio.
Many regional towns rely heavily on one or two industries—such as mining, agriculture, or tourism. A downturn in that industry can significantly impact local employment, property values, and rental demand. To mitigate this, look to invest in towns with diverse economies and long-term infrastructure projects that can attract a variety of jobs and industries. The local council websites will be able to showcase where government money is being spent and the major infrastructure projects planned.
If its long-term capital growth that you’re looking for, it is important to understand that while regional towns often provide strong rental yields, long-term capital growth may be slower or inconsistent compared to major cities. You should put focus on regional centres with proven growth trends, strong transport links, and government or private investment initiatives.
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Disclaimer:
Aus Property Professionals Pty Ltd retains the copyright in relation to all the information contained on its website and in this guide. This guide, and any content provided in addition, or linked to resources, is general information only and not investment advice. As everyone’s individual situation is different, we advise individuals to always seek advice from relevant professionals such as legal, financial, accounting, and investing experts.
The intention of this guide is to be used for general information purposes only, in addition to your personal research and due diligence. We do not take any responsibility for any actions taken as a result of this guide as any actions should always be taken with consultation with relevant professionals who take individual circumstances to account.
Past performance doesn’t guarantee future results.
We have compiled the information contained in this guide from online resources, our research, and consultations, and we cannot guarantee the complete accuracy of this information, and we will always reference the resources where the data and information was derived.
