The best suburbs for investment opportunities in Australia in 2025
There’s money to be made in the property market — if you know where to look.
2 min
If you’re a first homebuyer, owner/occupier or investor, you might feel that the property market is slim pickings in some of your favourite city suburbs. Either there’s no supply or the reserve is well above your budget threshold. However, for those property-savvy individuals prepared to look harder, there’s a growing number of suburbs in Australia’s major cities that are proving to be great investment opportunities…
—…you just need to know where to find them.
Independently-owned real estate agency, Little Real Estate, has released its annual report for the best Australian suburbs for investing. Investors searching for affordability, cash flow, and capital growth potential are being encouraged to consider regional locations, including four in Queensland.
“In 2024, we anticipate a surge in property prices fuelled by the relentless demand for housing outpacing the available supply,” says Little Real Estate executive general manager of sales, James Kirkland. “An exceptionally strong rental market, coupled with a shortage of housing, continues to exert upward pressure on house prices nationwide.”
Real estate analyst Hotspotting’s National Top 10 Positive Cashflow Hotspots echoes the findings of Little Real Estate’s annual report. Its analysis found that Queensland locations showed exponential capital growth, with the Sunshine State securing half of the top 10 locations.
“Cash flow has become increasingly important over the past two years, given the much higher mortgage repayments in play,” says Hotspotting director, Terry Ryder. “It is imperative that investors seek out areas that also offer capital growth prospects, often due to their booming local economies across a diverse range of industries.”
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Which location is best for a property investment?
It depends! According to Little Real Estate, in 2024, the Sydney suburbs of Wiley Park and Kensington come out on top, along with Caloundra West and Southport in South East Queensland, and Carlton and Moonee Ponds in Melbourne.
What is the most in-demand suburb in Sydney?
The property market is certainly inflated in Sydney in comparison to other states but investors can still find some gems in certain pockets of the city. Take Penrith, for example. According to REA data, the average cost of a unit in Penrith costs $540,000, with a rental yield of 4.3%.
Which state is best for investment property in Australia?
It’s hard to go past Queensland as one of Australia’s best states for investment properties. With four out of ten suburbs in Queensland appearing in Little Real Estate’s annual report—including Southport, Caloundra West, Coomera and Bulimba—Queensland and its surrounding suburbs, typically regional, are presenting as great investment opportunities.
“Whether you’re an investor, a family looking for a new home, or a professional seeking the ideal work-life balance, these suburbs are the ones to watch for growth and potential in the upcoming year,” says Kirkland.
What is the fastest growing suburb in Australia?
According to Smart Property Investment, the fastest growing suburb in Australia is Chelmer, Queensland – a south-western suburb in the city of Brisbane, with a quarterly price growth of 29.33 per ent. This is followed closely by Frenchs Forrest in NSW, and Greenmount in Queensland.
Records keep falling in 2025 as harbourfront, beachfront and blue-chip estates crowd the top of the market.
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The 2026 McGrath Report warns that without urgent reforms to planning, infrastructure and construction, housing affordability will continue to slip beyond reach for most Australians.
3 min
Australia’s housing market has reached a critical juncture, with home ownership and rental affordability deteriorating to their worst levels in decades, according to the McGrath Report 2026.
The annual analysis from real estate entrepreneur John McGrath paints a sobering picture of a nation where even the “lucky country” has run out of luck — or at least, out of homes.
New borrowers are now spending half their household income servicing loans, while renters are devoting one-third of their earnings to rent.
The time needed to save a 20 per cent deposit has stretched beyond ten years, and the home price-to-income ratio has climbed to eight times. “These aren’t just statistics,” McGrath writes. “They represent real people and real pain.”
McGrath argues that the root cause of Australia’s housing crisis is not a shortage of land, but a shortage of accessibility and deliverable stock.
“Over half our population has squeezed into just three cities, creating price pressure and rising density in Sydney, Melbourne and Brisbane while vast developable land sits disconnected from essential infrastructure,” he says.
The report identifies three faltering pillars — supply, affordability and construction viability — as the drivers of instability in the current market.
Developers across the country, McGrath notes, are “unable to make the numbers work” due to labour shortages and soaring construction costs.
In many trades, shortages have doubled or tripled, and build costs have surged by more than 30 per cent, stalling thousands of projects.
Need for systemic reform
McGrath’s prescription is clear: the only real solution lies in increasing supply through systemic reform. “We need to streamline development processes, reduce approval timeframes and provide better infrastructure to free up the options and provide more choice for everyone on where they live,” he says.
The 2026 edition of the report also points to promising trends in policy and innovation. Across several states, governments are prioritising higher-density development near transport hubs and repurposing government-owned land with existing infrastructure.
Build-to-rent models are expanding, and planning reforms are gaining traction. McGrath notes that while these steps are encouraging, they must be accelerated and supported by new construction methods if Australia is to meet demand.
One of the report’s key opportunities lies in prefabrication and modular design. “Prefabricated homes can be completed in 10–12 weeks compared to 18 months for a traditional house, saving time and money for everyone involved,” McGrath says.
The report suggests that modular and 3D-printed housing could play a significant role in addressing shortages while setting a new global benchmark for speed, cost and quality in residential construction.
Intelligent homes
In a section titled Weathering the Future: The Power of Smart Design, the report emphasises that sustainable and intelligent home design is no longer aspirational but essential.
It highlights new technologies that reduce energy use, improve thermal efficiency, and make homes more resilient to climate risks.
“There’s no reason why Australia shouldn’t be a world leader in innovative design and construction — and many reasons why we should be,” McGrath writes.
Despite the challenges, the tone of the 2026 McGrath Report is one of cautious optimism. Demand is expected to stabilise at around 175,000 households per year from 2026, and construction cost growth is finally slowing. Governments are also showing a greater willingness to reform outdated planning frameworks.
McGrath concludes that the path forward requires bold decisions and collaboration between all levels of government and industry.
“Australia has the land, demand and capability,” he says. “What we need now is the will to implement supply-focused solutions that address root causes rather than symptoms.”
“Only then,” he adds, “can we turn the dream of home ownership back into something more than a dream.”
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