Moore also noted that these locations often have thinner rental markets. “There’s just not as much supply and availability as the inner city, where you have a deeper rental market that historically can carry some risk of properties sitting vacant, and so you see higher yields to compensate,” he said.
“That hasn’t been true in recent years, where regional rental markets have seen extremely tight conditions. We’ve also seen very strong demand for regional and outer suburban homes, both to rent and to buy, and that’s driven up rents a lot in those areas.”
Moore attributed Queensland and Western Australia’s strong representation to recent market trends. “Regional Queensland is still solid, even if growth is slower this year and they’re also extremely tight rental markets,” he said. “These areas have seen extraordinarily low rental vacancy rates and commensurately very strong growth in rents over that period. So that continues to make them attractive to investors.”
He added that interstate migration had played a role, with many families moving from New South Wales and Victoria to Queensland. “There’s not a lot of opportunity in NSW and Victoria compared to the other states on this list,” Moore said. “That’s not to say there aren’t good opportunities for investors in those states, but certainly relative to those smaller states and smaller capitals, Sydney and Melbourne just haven’t performed as well.”
The report is based solely on data, and Moore cautioned that investors should conduct further research before making decisions. Some suburbs on the list, such as Rochester in Victoria and Lismore in New South Wales, have experienced significant natural disasters.