New research lists lesser-known regions delivering strong capital gains
A new analysis has identified 10 regional and outer suburban areas across Australia that have quietly delivered significant capital growth, challenging long-standing assumptions about the property market.
Terry Ryder, director at Hotspotting, has called into question many widely held beliefs about where price growth occurs. “Some of the oldest, and most inaccurate, beliefs about prices refuse to die,” he said. “These are all classic pieces of misinformation because research ridicules all of them.”
Ryder’s research suggests that affordable areas, including smaller cities, outer suburbs, and regional locations, have outperformed traditional blue-chip markets in recent years.
“However you look at them, the statistics show that cheap outperforms expensive, which means in simple terms that the smaller cities, the outer-ring areas of our biggest cities, regional locations and, more recently, attached dwellings,” he said. “Many may aspire to live in Toorak or Bondi Beach, but that doesn’t translate into high demand because most can’t afford the multimillion-dollar price tags. The bulk of buyer demand goes to the more affordable areas.
“However, many buyers have been fixated on Brisbane and Perth as well as more blue-chip suburbs in Adelaide and have missed out on achieving superior results because of it. All of these areas are affordable, with some classified as stigmatised because of the demographics of the people who live there, crime rates, or the region is prone to particular weather events like floods. But the results have been extraordinary for buyers who sought out these undercover regions because they understood their market fundamentals and looked past outdated real estate investment tropes.”
According to Hotspotting’s latest findings, Queensland, South Australia, and Western Australia have produced the strongest capital growth over the past five years. The research highlights 10 “undercover” regions that have outperformed more prominent markets, often overlooked by buyers focused on capital cities or upmarket suburbs. These regions are:
- Bundaberg, QLD: Bundaberg has 18 markets with 15%-plus capital growth averages, the same number as the much larger Gold Coast City. Two of them averaged above 20% a year.
- Fraser Coast, QLD: The Fraser Coast has 17 markets with 15%-plus capital growth averages, compared to seven on the Sunshine Coast, including Maryborough, which suffers regular Mary River floods but has averaged 18% per year.
- Geraldton, WA: The cheap downmarket suburbs of Geraldton have risen fast from a low base, with Spalding averaging 24%, Utakarra 25% and Rangeway 38% per year.
- Gympie, QLD: Gympie has been stigmatised as a problem town, but all its suburbs have averaged 16% to 18% a year over the past five years – despite a history of floods.
- Kwinana, WA: The cheapest and most downmarket precinct in Greater Perth, but all of its suburbs have excelled, including five averaging above 20% per year.
- Lockyer Valley, QLD: The Lockyer Valley is a cluster of little-known towns between Ipswich and Toowoomba, headed by Gatton, and has outperformed over the past five years. Neighbouring Somerset LGA also has over-achievers like Esk and Kilcoy as well.
- Murray Bridge, SA: Hardly anyone outside SA would know of this town, but it has averaged 18% per year over the past five years.
- Playford, SA: Arguably the most downmarket and stigmatised location in capital-city Australia, but 15 Playford suburbs have topped 15% per year, with nine of them above 20% per year. Seven of the Elizabeth suburbs topped 15%. The neighbouring Salisbury LGA also has 15 markets on the list of high achievers.
- Port Pirie, SA: Port Pirie has become popular with investors seeking cheap houses and high rental yields. Risdon Park has averaged 21% and Solomontown 24% a year.
- South Burnett, QLD: Kingaroy, Nanango and Murgon have all excelled on five-year growth with strong results still occurring.
Ryder (pictured right) also challenged the notion that factors such as income levels, social housing, or crime rates in a suburb should deter investors.
“One of the great furphies in real estate is that areas with above-average crime rates are bad places to invest,” he said. “Many investors fixate on this and they will reject any location they perceive as being downmarket, stigmatised or having high crime. I’ve always thought this was wobbly thinking and a case of real estate snobs trying to justify an attitude.”
He pointed to suburbs such as Wiley Park in Sydney and Inala and Deception Bay in Greater Brisbane as examples of stigmatised areas that have still achieved strong capital growth. “The reasons why property values rise have little to do with prestige or timeless quality, or proximity to the CBD or swimming pools,” he said.
“It’s not about the best streets in the best suburbs. The reality that the downmarket areas are the best performers is a win-win-win situation for buyers at the affordable end of the market – cheaper prices, higher rental yields and superior capital growth.”
For mortgage brokers, these findings highlight the importance of looking beyond traditional “blue-chip” suburbs. Brokers who guide clients towards affordable, high-growth regional and outer suburban areas may help them access better capital gains and rental yields. Understanding these trends can position brokers as trusted advisers and open new business opportunities in markets often overlooked by mainstream investors.
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