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When it comes to property investment, chances are, if you’re a local investor you’ll already have a very good idea of where the best suburbs to invest in Australia are. Foreign investors on the other hand may very well be shrugging their shoulders when considering where is the best place to buy property in Australia.
To complicate matters, what might be a golden investment suburb for one owner, might not be so good for another. It all depends on your investment goals after all. Are you after a lucrative rental yield? Or would you rather some hefty capital growth?
Knowing which suburbs work best for which goal is crucial when deciding where to buy property in Australia as an overseas investor.
Lucky for you foreign investors, this article is all about breaking down the best suburbs to invest in Australia. From the suburbs that get the best rental yields to expert picks going into 2022, consider this a part of your handy Australia property guide.
Highest capital growth suburbs in Australia
Australia is nothing if not renowned for its booming property values. Since 1993 our national median house prices have shot up over 400%! So, if you’re a long-term overseas investor looking for that big cash payout when it comes round to selling time, look no further than the Aussie market.
But the question remains: where is the place to buy property in Australia if you’re after capital growth?
Well, the recent Corelogic report into Australia’s ‘Top Performing Suburbs’ certainly provides some data-backed answers, compiling a list of the top 50 capital growth suburbs in Australia based on factors like:
- median value increases of more than 10% over a 12-month, 3-year and 5-year period
- no less than 50 sales over 12 months
Here’s the top 5 go-to places for property investment in Australia for foreigners after capital growth:
Top 5 Property Investment Suburbs after Capital Growth
Annual median value increase
Average property value
# Listings for sale last month
Caringbah South, NSW
North Epping, NSW
Charters Towers City, QLD
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Best rental yield suburbs in Australia
If you’re an overseas investor and you want your investments rolling in the financial green sooner rather than later, then strong rental yield suburbs might be more suited to you.
Granted, capital growth may be on the modest side, but that’ll be more than made up for by the positive cash flow you stand to gain from those minimal expenses and greater rental income.
So…where are the best rental yield suburbs in Australia? Corelogic’s ‘Top Rental Performers Report’ sure has some insights.
After scouring the states for real estate with consistent rental growth and vacancy rates under 3%, Corelogic revealed the 100 best suburbs to invest in Australia when it comes to rental yields - here's the top 5.
Top 5 Property Investment Suburbs for Rental Yields
Median rental income
Gross rental yields
Park Avenue, QLD
The data is in folks. Queensland seems to be the place to go for property investment in Australia for foreigners hungry for those high rental yields.
Capital cities v regional investment property in Australia
Knowing what the raw data has to say is a good start. But if you really want to invest in a property that’s gonna work with (and not against) your investment goals, it’s well worth noting the differences between metro suburbs and regional suburbs.
Where are investors buying?
Despite regional towns coming in with a much cheaper price tag, it’s the inner-city unit markets that have long been the hotspot for residential dwelling investment.
But that’s not the end of the story. Coastal towns with a flair for tourism like the Gold Coast, all the way up to Far North Queensland, have seen their fair share of investment interest over the years. Mining towns, too.
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Can I afford a capital city property?
You might be thinking that because Australian capital cities have a much higher capital requirement than regional areas that you’re all but locked out of these inner-city markets.
Not so! Many Aussie investors have already found a neat way around this financial hurdle. The secret? Look for real estate that is well below the capital city median value. In recent years, almost 60% of investor-owned dwellings in Sydney were less than the city median.
Not only that, but going by historical data, a near whopping 50% of investor-owned capital city properties have a market value of under 500k!
So yes, while the big fish like Sydney and Melbourne may look a bit daunting with their high asking prices, you can still maneuver your way into the market with a bit of savvy sleuthing.
What do the experts say?
If we take a page from the book of Michael Yardney, one of Australia’s leading property investment advisors and trusted property commentators, then a very clear rule begins to emerge.
- On average, over the past 40 years, capital cities have outperformed regional properties
- He anticipates that capital cities will experience increased economic growth, more higher-paying jobs, and eventual population growth
All this real estate expert analysis and opinion, of course, is making the case for why capital cities are the best suburbs to invest in Australia.
But, any foreign investor keen on taking this advice should know that capital city markets, at the end of the day, are there for capital growth! So, don’t count on getting lofty rental yields if you’re about to purchase a Melbourne unit. It’s regional Australia you want for those hefty rental returns.
So.. Where is the best place to buy property in Australia?
Depending on who you’re listening to or which ‘Top suburbs list’ you’re looking at, you’re always going to get a difference of opinion about just what are the best suburbs to invest in Australia in 2022. Which can be especially confusing as a foreign investor.
So, to save you the hassle of scouring the net and dissecting those lists one by one, we’ve taken 3 of the most reputable ‘best investment suburb lists for 2022’ and tabled the top 5 suburbs from each of them.
After looking at factors like dipping inventory levels, days on the market, increasing asking prices, new transport infrastructure and lifestyle appeal, (to name a few), here’s what those reports and experts have to say..
Best Overall Investment Suburbs
Well Home Loans Green Shoot Report
Me Bank Research Report
Deebing Heights, QLD
Avalon Beach, NSW
Burleigh Heads, QLD
Five Dock, NSW
Davoren Park, QLD
North Melbourne, VIC
Sources : Well Home Loans Green Shoot Report, Me Bank Research Report, McGrath Report
Note: McGrath report did not numerically order suburbs but arranged them by city, this table reflects their chronological order in the actual report
*MDV: Median House Value
*MRY: Median Rental Yield
*MHPC: Median House Price Change – 1 year
*Metrics taken from Real Estate Investar
There you have it folks. What the real estate experts have to say about where is the best place to buy property in Australia come 2022. We’d highly recommend taking a gander at the full reports for yourself, so you can get a more thorough insight into just what makes these the best suburbs to invest in Australia going into the new year.
We’ve shown you the best suburbs to invest in Australia when it comes to capital growth, and the best when it comes to rental yields. We’ve even shown you what 3 of the country’s top reports have to say about 2022s best investment suburbs.
But in the end, one of the big decisions you have to make (if not the biggest decision) about Aussie property is whether you’re after high capital growth or high rental yields. Wanting one or the other will really go a long way in narrowing your search down to either the regional market or the capital city variety.
Because while regional Queensland suburbs might deliver big on the weekly rent and only cost you pennies to purchase, it’s the costly capital city suburbs that will hand you a hefty profit when you decide to sell.
Final advice for foreign persons looking to pass through the Foreign Investment Review Board and get your hands on some sought-after Aussie property: know your investment goals! From there you can look at the data with discerning eyes and know exactly what kind of suburb is right for you.
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Disclaimer: The views, information, or opinions expressed in this blog post are for general information purposes only and should not be relied upon. We have not taken into account specific situations, facts or circumstances, and no part of this blog post constitutes personal financial, legal, or tax advice to you. You should seek tax advice from your accountant, specific to your situation.