Investors in outer-metropolitan and regional areas record sharp capital growth from modest entry prices
Affordable property markets have produced some of the strongest investment outcomes in Australia over the past two years, with several suburbs recording price growth of up to 88%, according to a joint review by Washington Brown and Hotspotting.
The analysis revisited 50 “high-yield locations” first identified in November 2023 as areas combining strong rental returns with capital growth potential. The latest data show that buyers who purchased at median prices in those suburbs have typically seen gains of around 30% to almost 90% in two years.
“Imagine this scenario as an investor – you paid less than $300,000 for a house in 2023 and you achieved a rental yield of close to eight per cent from day one,” said Terry Ryder (pictured top left), founder of Hotspotting. “Then two years later, the property has grown 85% in value. You’ve made a capital gain of $250,000 and own a positive-cash flow property.
“Our analysis has found that anyone who bought at the median house price in any of the 50 locations featured our report from two years ago would have achieved growth in values – in most cases, growth ranging from 30% to almost 90%.”
Armadale, in Greater Perth, topped the table. Its median house price rose from $325,000 in November 2023 to $610,000 in November 2025, an 88% increase and a gain of $285,000 for buyers at the median.
Withers in Bunbury ranked second, up 85% from $295,000 to $545,000. Other Western Australian entries in the top 10 were Orelia (up 75% to $640,000), Balga (up 71% to $660,000), Midland (up 71% to $632,000) and Gosnells (up 67% to $650,000).
Regional Queensland and South Australia also featured. Berserker in Rockhampton and Aitkenvale in Townsville both rose 69%, to $482,000 and $575,000 respectively. Lowood in Greater Brisbane recorded a 67% increase, while Elizabeth Downs in Adelaide grew 66%.
“These markets were originally selected for their strong rental returns and underlying fundamentals, but what we’ve seen since is extraordinary capital growth as well,” Ryder said.
“The message for investors from this analysis proves yet again that you don’t need to buy in expensive suburbs to achieve exceptional results. The best growth stories are happening in the most affordable parts of Australia.”
Tyron Hyde (pictured top right), chief executive of Washington Brown, pointed out that depreciation has become more important as prices have risen and yields have eased. “Depreciation is no longer a secondary benefit because it’s doing real work in supporting cash flow,” he said. “As prices rise and yields reduce, the depreciation factor becomes more important.
“A 5.7% yield can become 6.2%, 5.6% becomes 6.5%, 6.3% becomes 7.15% and 7.1% becomes 7.65% after factoring in depreciation. In 2026, it is one of the key reasons that certain markets continue to outperform on an after-tax basis.”
Hyde noted that in northern centres such as Darwin and Cairns, higher construction costs are translating into larger depreciation deductions. “Depreciation is based on what it costs to build, not what a property sells for,” he said. “In places like Darwin and Cairns, construction costs are structurally higher – and that flows directly into higher depreciation deductions.
“Buildings in these regions typically require cyclone-rated structures, heavier use of concrete and steel, and incur higher freight and labour costs, so, as a result, a larger proportion of the purchase price is attributable to the building rather than the land.”
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