Unearthed: The regional areas ripe for investment
Strong yields make these ‘secondary cities’ attractive options
2 min
New analysis has revealed some of Australia’s most promising non-capital city property investment markets, where would-be buyers can find relatively affordable opportunities.
Real estate analytics firm Suburbtrends looked at secondary cities within 200km of a capital and applied more than a dozen key metrics to unearth suburbs that deliver a minimum 4.5 per cent yield.
Kent Lardner, Suburbtrends’ chief analyst, said the research took into account rental affordability, location, socio-economic ranking, price growth, inventory levels and vacancy rates.
That criteria narrowed the search to four regions – Bunbury and Mandurah in Western Australia, and the Gold Coast and Sunshine Coast in Queensland.
“Bunbury boasts the highest count of suburbs making the cut at 12, as well as the most listings available, most house options and the best median yield at 6.2 per cent,” Mr Lardner said.
“This combination of factors portrays Bunbury as an attractive market for both investors and
potential homebuyers.”
Among the suburbs identified was Binningup, which provides a strong market for house investments – with seven currently on the market at a median price of $499,000 and a rental median of $550 per week, yielding a very healthy 7.94 per cent.
College Grove was also a strong pick, with four houses currently on the market at a median price of $492,000 and a rental median of $510 per week, yielding 5.89 per cent.
“Bunbury stood out in our analysis, not just for its gateway status to the southwest region but for the balance it offers between liveability and investment appeal,” Mr Lardner said.
“Its unique characteristics align well with our criteria, making it a significant highlight in our shortlist.”
Meanwhile, the analysis produced 11 suburbs on the Gold Coast that fit the bill – a region that “excels in rental market dynamics”.
Among them was Bundall, a popular spot for investors. There are currently 12 units available at a median price of $557,000, yielding 5.76 per cent.
A few hours up the road, the Sunshine Coast was another strong performer in the analysis with a host of qualities that indicate a “mature and stable property market”.
Among the picks was the suburb of Wurtulla, which stood out for its unit prospects with four apartments on the market at a median price of $645,000, yielding 4.71 per cent.
Mr Lardner said Buderim was also on the list, with 27 units for sale at a median price of $585,000, yielding 4.85 per cent.
Finally, Mandurah produced four suburbs that fit the research scope, including Halls Head, where there are 64 houses on the market with a median price of $565,600, yielding 4.84 per cent.
The suburb also made the list for units, with eight up for grabs at the moment with a median price of $400,000 and a rental median of $500 per week, yielding 6.91 per cent.”
Mr Lardner said the research offers “a multifaceted perspective” on the current state of the property market in key non-capital locations.
“It’s a snapshot that reveals trends, opportunities, and challenges, providing practical guidance for both investors and homebuyers.”
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Strong consumer spending and tight supply have driven retail to the top of commercial property, but signs of pressure are starting to emerge.
2 min
Australia’s retail property sector entered 2026 as the strongest performing commercial asset class, but rising geopolitical risks and cost pressures are beginning to test its resilience, according to new research from Knight Frank.
The latest Australian Retail Review shows the sector rode a wave of consumer spending and constrained supply through 2025, delivering total returns of 9.2 per cent and driving transaction volumes up 43 per cent year-on-year to $14.4 billion.
That momentum carried into early 2026, with around $3.6 billion in deals recorded in the first quarter alone.
“Retail clearly emerged as the standout commercial property performer in 2025,” said Knight Frank Senior Economist, Research & Consulting Alistair Read.
“Improving household spending, limited new supply and stronger leasing fundamentals combined to drive better income growth and renewed investor confidence in the sector.”
Spending rebound drives retail strength
A lift in household spending has been central to the sector’s performance. Consumer spending rose 4.6 per cent year-on-year to February 2026, supported by easing inflation and improving real incomes.
That shift flowed directly into retailer performance, with average EBIT margins across major retailers rising to 8.9 per cent in the first half of 2026, their strongest level in several years.
“Stronger consumer spending was critical in restoring momentum to the retail sector,” Mr Read said.
“Retailers have generally been better able to absorb costs, rebuild margins and support sustainable rental outcomes, particularly in higher-quality centres.”
Improved trading conditions also pushed leasing spreads up 4.2 per cent in 2025, reinforcing income growth and supporting capital values.
Geopolitical tensions begin to bite
But the outlook has become more complicated. The report warns that escalating conflict in the Middle East and its impact on fuel prices, supply chains and interest rates could weigh heavily on consumer spending.
“Higher fuel prices, flow-on cost pressures across supply chains, and recent interest rate increases are collectively squeezing household budgets, and early consumer sentiment data suggests confidence is already softening,” Mr Read said.
“While household balance sheets remain generally resilient, heightened uncertainty over future costs is likely to weigh on spending — particularly in discretionary categories — in the months ahead.”
The impact is already being felt in investment activity. While the year began strongly, transaction volumes slowed in March as investors paused amid the uncertainty.
“Early indicators suggest elevated uncertainty has already begun to affect the market. While retail investment enjoyed its strongest start to a year in a decade, with nearly $3 billion transacted by the end of February, activity stalled in March, as investors took a pause amid elevated uncertainty,” Mr Read said.
Solid foundations support medium-term outlook
Despite the near-term headwinds, Knight Frank maintains that the sector’s underlying fundamentals remain strong. Limited new supply, high construction costs and population growth are expected to continue supporting rental growth over the medium term.
“Retail has entered this period of uncertainty from a position of strength,” Mr Read said.
“Supply-side constraints, population growth and improving income fundamentals remain powerful structural supports for the sector.”
The report highlights several trends shaping the year ahead, including steady yields as interest rates rise, mounting pressure on tenant margins, continued outperformance of prime centres, the growing need for logistics integration, and risks linked to underinvestment in capital expenditure.
For now, retail remains a sector with momentum, but one increasingly at the mercy of forces far beyond the shopping centre.
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