Regional Australia is where some of the strongest investment fundamentals sit right now. Lower entry prices, higher yields, tighter vacancy, and infrastructure spending that hasn’t been priced in yet.
Here are 10 regional markets we’re watching closely in 2026, with current data on each.
How we assess regional markets
Before diving into individual locations, here’s what we look at. Every market gets scored across five factors: median price and entry point, gross rental yield, vacancy rate, infrastructure pipeline, and employment diversity. A market that’s strong on yield but weak on employment diversity is a different proposition to one that delivers both. For a deeper look at how growth and yield work together in a portfolio, see our guide to capital growth vs rental yield.
Cairns, QLD
Median house price: ~$695,000 Gross rental yield (houses): ~4.8% Vacancy rate: Below 1% 12-month growth: ~10.8%
Cairns has been one of the strongest regional performers in Queensland. Vacancy rates have sat below 1% for over two years running, which puts serious upward pressure on rents. Median weekly rents for houses are now around $640.
The infrastructure pipeline is significant. A $1 billion expansion of Cairns Hospital is in planning, with construction expected to commence in late 2026. The airport is also undergoing a $60 million Eastern Aviation Precinct development. Both projects create construction jobs in the short term and permanent employment growth longer term.
Beyond tourism, the health and education sectors are growing, which is broadening the employment base and reducing single-industry dependency.
Townsville, QLD
Median house price: ~$605,000 Gross rental yield (houses): ~4.7% Vacancy rate: ~0.6% 12-month growth: ~15.6%
Townsville’s growth has been driven by one of the largest infrastructure pipelines in regional Australia. The CopperString 2032 project alone received a record $2.4 billion in state funding this year. It’s the biggest expansion to the power grid in Australia, connecting the North West Minerals Province to the national electricity grid.
Beyond CopperString, Townsville has over $12 billion in committed projects across defence, energy, and port infrastructure. That level of government and private investment creates sustained employment growth, which is the fundamental driver of property demand.
Vacancy at 0.6% is extremely tight. Rental growth has been above 9% over the past 12 months. Entry prices are still reasonable relative to the yield and growth combination.
Toowoomba, QLD
Median house price: ~$650,000 (varies by suburb) Gross rental yield (houses): ~4.4% Vacancy rate: Below 1.5% 12-month growth: Moderate
Toowoomba sits 125km west of Brisbane and benefits from strong fundamentals without the coastal premium. The Inland Rail project, connecting Melbourne to Brisbane via regional centres, passes through Toowoomba and adds long-term infrastructure upside.
Rental demand is solid, with yields around 4.4% in North Toowoomba and slightly higher in outer suburbs. The employment base is diverse across health, education, agriculture, and logistics. Population growth has been steady.
The entry point is lower than coastal QLD markets like Cairns or the Gold Coast, which gives investors a better yield for the same rent. For first-time investors, Toowoomba is one of the more accessible regional markets. See our beginner’s guide for what to look for in your first purchase.
Geraldton, WA
Median house price: ~$450,000-$520,000 Gross rental yield (houses): ~5.5% Vacancy rate: Very tight (sub-1% inventory) 12-month growth: Mixed signals
Geraldton saw strong price growth through mid-2025, driven by extremely tight supply (0.3% stock on market) and less than one month of inventory. However, more recent REIWA data suggests growth has cooled, with Geraldton one of the few WA regional markets where prices have softened in recent quarters.
Yields remain the strongest on this list at around 5.5% for houses, with median rents around $485 per week. The supply constraints are still structural, and the entry point is well below Perth.
The risk with Geraldton is that it’s a smaller market with less employment diversity than the larger regional centres. Mining and agriculture are the primary drivers. If commodity prices soften, demand can ease quickly. Geraldton is a yield play right now, not a growth play. Investors need to go in with realistic expectations on capital appreciation.
Bunbury, WA
Median house price: ~$700,000 Gross rental yield (houses): ~4.8% Vacancy rate: Tight (around 1%) 12-month growth: Modest (~3%)
Bunbury is the largest regional centre in WA’s south-west and has seen steady growth off the back of Perth’s broader market expansion. Median rents for houses sit around $650 per week.
Supply remains tight, with just over one month of inventory on market. The employment base is more diversified than smaller WA regional towns, with health, education, retail, and mining services all contributing.
The entry point is higher than Geraldton, but the market is deeper, more liquid, and less dependent on a single industry. For interstate investors looking at WA, Bunbury offers a more balanced risk profile than the smaller mining-adjacent towns.
Mandurah, WA
Median house price: ~$575,000 Gross rental yield (houses): ~5.0% Vacancy rate: Very tight 12-month growth: ~23.7%
Mandurah, about an hour south of Perth, has delivered some of the strongest growth in WA over the past year. Properties are moving in an average of 18 days, which tells you how competitive the buyer market is.
Yields around 5% combined with 23.7% capital growth makes this one of the highest-performing regional markets on a total return basis. The rental market is under sustained pressure with very low vacancies and limited new housing supply.
Mandurah benefits from proximity to Perth, lifestyle appeal, and relatively affordable entry compared to Perth metro suburbs. The demographic is shifting as remote workers and retirees drive population growth.
Bendigo, VIC
Median house price: ~$607,500 Gross rental yield (houses): ~4.0% Vacancy rate: ~1.8% 12-month growth: Moderate
Bendigo is one of Victoria’s key regional centres, about 150km north-west of Melbourne. The rental market is tight, with vacancy well below the REIA’s 3% benchmark and median rents for houses around $460 per week.
Rental growth has been around 5.7% over the past 12 months, with a decline in the number of houses available for rent, pointing to undersupply. The employment base is diverse across health (Bendigo Health is a major employer), education, retail, and government services.
Yields are lower than the QLD and WA regional markets on this list, which is typical for Victoria. But the entry point is reasonable, supply is constrained, and the fundamentals are stable. Bendigo is more of a steady, long-term hold than a high-growth play.
Geelong, VIC
Median house price: ~$793,000 Gross rental yield (houses): ~3.5-4.5% (varies by suburb) Vacancy rate: ~1.4% 12-month growth: ~3.2%
Geelong is the largest regional city in Victoria and has a median house value above $790,000, making it one of the more expensive regional markets. Yields are compressed for houses in established areas (sub-3.5%), though suburbs like Whittington (4.5% yield) and Norlane (4.4%) offer better returns.
A $900 million Geelong Line Upgrade has been completed, improving rail connections to Melbourne. The broader Geelong Fast Rail project, which aimed to cut travel times to 50 minutes, has had Commonwealth funding withdrawn, though completed works have already improved connectivity.
The higher entry point means Geelong suits investors with more capital who are looking for long-term growth backed by strong population fundamentals and proximity to Melbourne. Vacancy below 1.5% supports rental demand.
Mildura, VIC
Median house price: ~$513,000 Gross rental yield (houses): ~5.1% Vacancy rate: Tight 12-month growth: ~15.9%
Mildura is a strong yield play in regional Victoria. At around 5.1% gross for houses and an entry point around $513,000, the numbers stack up for cash-flow-focused investors. Median rents are around $460-$490 per week and days on market are low.
The economy is driven by agriculture, food processing, tourism, and health. Employment diversity is reasonable for a regional centre of its size. Population growth is steady.
With 15.9% growth over the past 12 months and yields above 5%, Mildura is delivering on both fronts right now. For investors looking at how growth and yield work together, this is one of the stronger regional examples in Victoria.
Devonport, TAS
Median house price: ~$485,000 Gross rental yield (houses): ~4.9% Vacancy rate: Sub-1% 12-month growth: ~4.3%
Devonport is one of the more affordable entry points on this list. At around $485,000 median, the numbers are accessible for investors building a first or second property. Yields around 4.9% with vacancy below 1% make for a tight rental market.
Growth has been more modest than the QLD and WA markets so far, at around 4.3% over the past year. But Tasmania’s property cycle tends to lag the mainland by 12-18 months, and that’s actually the opportunity here. Devonport is earlier in the cycle, with more growth likely ahead as the state’s recovery builds momentum. The Spirit of Tasmania port redevelopment, with two new larger vessels expected for the 2026-27 summer season, adds further demand.
The tradeoff is market depth. Fewer transactions means it can take longer to sell when you need to. For buy-and-hold investors, this isn’t a concern. For anyone who might need to exit within 3-5 years, the smaller market adds risk.
The quick comparison
| Market | Median price | Yield | Vacancy | 12m growth |
|---|---|---|---|---|
| Cairns, QLD | ~$695,000 | ~4.8% | <1% | ~10.8% |
| Townsville, QLD | ~$605,000 | ~4.7% | ~0.6% | ~15.6% |
| Toowoomba, QLD | ~$650,000 | ~4.4% | <1.5% | Moderate |
| Geraldton, WA | ~$450-520k | ~5.5% | <1% | Cooling |
| Bunbury, WA | ~$700,000 | ~4.8% | ~1% | ~3% |
| Mandurah, WA | ~$575,000 | ~5.0% | Very tight | ~23.7% |
| Bendigo, VIC | ~$607,500 | ~4.0% | ~1.8% | Moderate |
| Geelong, VIC | ~$793,000 | ~3.5-4.5% | ~1.4% | ~3.2% |
| Mildura, VIC | ~$513,000 | ~5.1% | Tight | ~15.9% |
| Devonport, TAS | ~$485,000 | ~4.9% | <1% | ~4.3% |
What this data tells you
The strongest yield-to-price ratios are in WA (Geraldton, Mandurah) and regional Victoria (Mildura). The strongest infrastructure pipelines are in North Queensland (Townsville, Cairns). The most balanced profiles, combining yield, growth, employment diversity, and market depth, sit with Townsville, Cairns, and Mandurah.
No single market ticks every box. The right one depends on your budget, your strategy, and where your existing portfolio sits. A growth-heavy portfolio needs a yield property to balance holding costs. A cash-flow portfolio needs a growth asset to build equity for the next purchase.
Regional markets reward investors who do the research and avoid the hype. The data is publicly available, but cross-referencing it, understanding local drivers, and knowing which streets within a suburb to buy on requires deeper work. That’s what we do with every client purchase through our off-market network across every state.
This is general information only and not financial advice. Market data reflects conditions at time of writing and may have changed. Speak to a qualified professional before making investment decisions.
If you want to discuss which regional markets suit your budget and strategy, book a free discovery call.