Regional Riches: Investing in Regional Towns in 2025

As Australia’s housing market settles into a new rhythm, with the Capital Cities becoming increasingly unaffordable for many buyers, regional towns are in focus with many investors’ radars. Regional towns provide a great starting point for any buyer as they can offer lower price points, stronger rental yields (in some centres), amenity-driven migration and increasing diversification (new restaurants and cafes). This is creating not only more appeal for regional markets, but job opportunities as working from home is now a normal way to operate our lives. There are many benefits buying regionally, but it comes with a buyer beware- the regional markets are not without their own risks.

Why regional towns have come into focus.

When we refer to regional Australia, we are not referring to just one market, but rather there are many regional markets with each having different characteristics and economic drivers like agriculture, mining, tourism, education, and lifestyle. In 2025, a few consistent themes stand out during this year. Many regional areas have continued to be driven by affordability — buyers who are priced out of capitals are choosing towns where they can get more for their money. Buyers are migrating regionally to benefit from infrastructure investment and work-from-anywhere patterns that have stuck post-pandemic. Where supply is tight and demand is rising, prices and rents can move quickly, delivering returns that sometimes outpace nearby capital cities. National and state market trackers have highlighted pockets of strong YTD growth across the regions, showcasing some promising returns for investors.

Pros of investing regionally

1. Affordability and entry price — In many regional towns you can buy a house for significantly less than in a capital city, which lowers the entry threshold and reduces borrowing pressure for home buyers and investors.
2. Stronger gross yields in some towns — Smaller purchase prices plus steady rents can generate stronger yields than some expensive inner-city suburbs. This gives a cash injection into an investment portfolio.
3. Lifestyle demand — Towns with lifestyle appeal (coastal, rivers, vineyards, mountains) attract owner-occupiers and tenants, supporting both capital growth and rental demand.
4. Diversification — Holding regional assets can diversify a portfolio that is otherwise concentrated in a single capital, reducing local cyclical risk.
5. Growth from specific drivers — Infrastructure expansions, agricultural demand, new schools, hospitals, transport, or tourism projects can create concentrated growth opportunities for investors to jump on board.
   
   

Cons and risks of regional investing

1. Sensitivity of Local economy — Regional towns are more likely to be affected by a single industry (mine closures, drought) which creates concentration risk.
2. Lower liquidity — Selling a regional property can take longer than selling in a capital city, especially at scale or during downturns.
3. Limited Tenant pool — Smaller populations mean fewer prospective tenants; vacancy can be patchy and seasonal in tourist towns.
4. Management and maintenance — Distance increases active management costs (travel for inspections, trades).
5. Infrastructure and services variability — Healthcare, education and transport availability differ widely between towns, and changes to services can materially affect demand.
6. Data and market transparency — While data is readily available for large cities, and any state-wide reports will cover broad movements focused on the main cities and suburbs. But when it comes to regional towns, there may be limited data available to keep an eye on regional micro-markets and the data for small towns is often thinner, making due diligence sometimes difficult.

Top performing regional towns — YTD 2025 (by state)

Below are examples of the leading regional performers YTD 2025, taken from state and national property reporting and market analyses. These are localised standout performers rather than an exhaustive ranking of every town in each state.

New South Wales — Lower Murray / Albury region

Data published in 2025 highlighted the Lower Murray region as one of the strongest regional performers in NSW, because of the annual dwelling value growth has been among the highest in the state. The broader Murray/Albury area — benefiting from border city dynamics (Albury-Wodonga), showcased lifestyle appeal and migration has been attracted to the area due to the improved connectivity. Albury and the Lower Murray precinct recorded notable YTD gains in 2025 around 7%-10% in some suburbs.

Victoria — Mildura and surrounding northwest regions

Victoria’s strongest regional lift in early-to-mid 2025 was concentrated in the north-west around Mildura, which reported solid year-on-year increases in median values. Other inland centres such as Bendigo and Wodonga also showed healthier performance, but Mildura’s north-west lift was a consistent headline, booming with 10% growth over the past 12 months and rental yields creeping towards 6%. (at October 2025).

Queensland — Bundaberg

Queensland’s regional story in 2025 has several high-growth centres, but industry reporting singled out Bundaberg for strong YTD increases — driven by a mix of affordability, local investment, and demand for coastal lifestyle properties. State association reporting showed Bundaberg posting among the highest annual increases in 2025 with upwards of 16% for 12 months growth and average annual growth rates rising towards 18%.

Western Australia — Geraldton and resource-linked regional centres

WA’s regional markets were noted in 2025 as tracking very strongly, with several coastal and resource-linked towns delivering double-digit growth. Regions such as Geraldton and some mining-supporting towns were repeatedly mentioned in state commentary as outperforming Perth in price growth YTD. For investors, tread cautiously in the resource heavy regional towns- these high-risk towns can often turn, resulting in plummeting real estate values. Always seek out towns with multiple growth drivers, that aren’t too resourced focused.

South Australia — Victor Harbor, Fleurieu Peninsula and selected coastal towns.

Analysts have flagged the regional lifestyle and coastal towns in SA like Victor Harbor and parts of the Fleurieu Peninsula for their strong prospects and solid YTD growth.
Victor Harbor showcased 12.8% growth in the past 12 months and a high average annual growth rate of 14%, making it a top performer for property growth.

Tasmania — Kingston, New Norfolk, and lifestyle suburbs outside Hobart

Some experts have tipped Tasmania’s regional and lifestyle suburbs as being primed for growth after a period of capital softening; Areas such as Kingston has become a top coastal/lifestyle town picked by experts because of limited supply and steady lifestyle demand, although close to 0% growth in the past 12 months, it hasn’t gone backwards and rental yields for some properties are nearing 5%.

Looking to invest regionally? Here is your evaluation checklist.

When it comes to investing regionally, a lot of due diligence is required as it can be a much riskier investment than putting your money into a capital city market.

What to look for when investing regionally:

1. Local economic drivers: Who employs people locally? Is the town dependent on one industry? Look for towns that have multiple economic drivers to support the local economy.
2. Population and migration trends: Is there net inflow (young families, sea-change buyers) or outflow? Council forecasts and ABS migration stats can help you here.
3. Listings and days on market: Tight supply + falling days on market suggests demand pressure. State quarterly reports often publish these metrics.
4. Rental market strength: Vacancy rates, median rents and time on market can tell you if tenants will be easy to find, avoid areas with high vacancy rates.
5. Infrastructure pipeline: look for areas that are building or improving schools and universities, health facilities, road upgrades and tourism investments as this will increase the demand dynamics for the region.
6. Local planning and zoning: Check council strategic plans for infill, subdivision or rezoning that could change future supply.
7. Exit strategy: understand your exit strategy and understand the turnover of properties in an area (through days on market)— a thin market may be harder to exit, drawing on your profits.
8. Operating and Management Costs: Talk to at least two local property managers for rental and maintenance cost expectations.

Overall, regional towns can provide excellent investment opportunities for investors as well as offer great lifestyle options at more affordable prices for homeowners. If you’re looking to buy regionally, it is important to do thorough local due diligence, risk management and have realistic expectations about liquidity and the costs involved for maintaining your property.
Employing an experienced buyer’s agent who is well-versed in the area can also assist you in finding the right regional location that will suit your needs for what you are trying to achieve.
There are many markets, and without proper knowledge of each market, it is difficult to determine which will be aligned to your strategy and long term goals.

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