Investors urged to consider regional rental opportunities

Regional locations throughout Australia often offer good opportunities for investors, offering more affordable entry points for residential properties and excellent yields.

Investors will be welcomed with open arms, too, since many areas have a chronic shortage of homes available for rental, particularly with the current popularity of sea and tree changes.

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“For people who want to try a regional lifestyle, buying a property can be a big investment, yet they’ve had little experience of the location,” says Liz Ritchie, the chief executive of the Regional Australia Institute (RAI). “Most people have only gained impressions from going there on holiday.

“Ideally, they might like to rent before they buy, but the rental market is well below capacity across regional Australia as it’s never, traditionally, been an investor market. We need more mum and dad investors to consider the regions to provide more stock to make it easier for people to come and try before they make the decision to move.”

The shift to regional living recently hit a record peak, with the RAI’s latest Regional Movers Index up 20.1 per cent on the December 2025 quarter, and movers to the regions outnumbering those relocating to cities by 29.7 per cent.

Price has certainly played a role, with the median house price in the combined regionals now sitting at $761,950, as against $1.276 million for the combined capitals, according to the latest Domain House Price Report.

Regional rents, however, are only slightly behind those of the city, at $610 a week compared to $700. Yields, as a result, can be much healthier too, at 4.25 per cent for the combined regional centres compared to 3.62 per cent for the cities.

Leading buyer’s agent Ravi Sharma, the founder of Search Property, says 90 per cent of his own personal investments and those of his clients are in the regions.

“I started investing in the regions 12 years ago,” he says. “Affordability was a big factor, and I believe that will continue to drive people to go out there from the cities. For, say, $800,000, you can buy a unit in Sydney or a four-bedroom house on 600 square metres of land in the regions.”

Sharma believes that, with demand continuing to outstrip supply, values will continue to rise, especially with the ability to work from home, and people prepared to commute one day a week to a capital city, if they can enjoy a quality regional lifestyle for the other six.

Yet there’s a note of caution from Metropole Property Investment Strategists’ Brett Warren. He believes that the last five or six years of exceptional growth might not continue.

“It did go crazy after 10 to 15 years of moving sideways, with exceptional growth fuelled by people moving out of capital cities and being able to work from home,” he says. “But I can’t see that growth level being sustainable.

“There aren’t the high levels of incomes usually in those areas to accommodate higher prices, and people tend to be more sensitive to budget and fuel costs.

“While there is a shortage of investment properties, there’s still a lot of land around those regional areas, unlike in the cities, that could be released.

“I would tend to stick with more urban markets where there’s less supply and a lot of jobs.”