Best Places To Buy Investment Property

Some of the best places for buying an investment property in Australia at the moment are Sydney, Brisbane, and Melbourne, thanks to strong market trends, competitive pricing, solid rental returns, and consistent demand.

As an investor, you want to invest in a property that earns either through rental yield or capital growth. That’s why it’s important to invest in a market with not only a growing population but also strong economic fundamentals and infrastructure.

In this blog, we’ll break down some of the top-performing suburbs in Sydney, Brisbane, and Melbourne. We’ll look at their growth rates, rental yields, and median house prices, helping you make a more informed investment decision.

We’ll also walk you through the key factors to consider when buying an investment property to help you make your purchase decision smooth.

Best Places To Buy Investment Property

Real estate has historically been a reliable investment, offering financial security through rental income or capital growth. Australian real estate, in particular, has a strong track record. CoreLogic states that median house values rose 412% in 25 years.

Let’s now discuss the best places to buy investment property in Australia.

Sydney

Sydney’s property market remains resilient, despite a recent slowdown in growth.

As of March 2025, the median price for houses sits at $1,464,132, reflecting a 1.3% annual increase, while units have a median price of $855,538, rising 0.7% over the past year.

And if you are looking for an investment property, units in Sydney rent out for $950 a week with an annual rental yield of 4.8%.

Here are the top suburbs in Sydney you can invest in:

The data shows Lakemba as a strong investment choice because:

• It has the highest annual growth rate among all the suburbs, at 20.8%.

• The average gross rental yield is decent at 2.8%.

• It has the lowest price point among the top performers.

Lakemba can be ideal for investors looking for capital growth with a relatively low entry cost.

Melbourne

Melbourne’s property market is showing signs of recovery after a recent period of decline.

As of April 2025, the median house price is $895,000, while units average $583,000.

Over the past year, Melbourne’s housing values have declined by 2.26%, making it the only Australian capital city with negative annual growth. However, March 2025 showed a 0.7% monthly increase, suggesting a market rebound.

And if you are looking for an investment property, houses in Melbourne rent out for $550 per week with an annual rental yield of 3.2%, while units fetch $480 a week with a gross rental yield of 4.3%.

Here are a few suburbs in Melbourne worth investing in:

Melbourne

Melbourne’s property market is showing signs of recovery after a recent period of decline.

As of April 2025, the median house price is $895,000, while units average $583,000.

Over the past year, Melbourne’s housing values have declined by 2.26%, making it the only Australian capital city with negative annual growth. However, March 2025 showed a 0.7% monthly increase, suggesting a market rebound.

And if you are looking for an investment property, houses in Melbourne rent out for $550 per week with an annual rental yield of 3.2%, while units fetch $480 a week with a gross rental yield of 4.3%.

As you can tell by the data above, Greenvale stands out as a top investment choice in Melbourne because:

• It has the highest growth rate in Melbourne (2.5%).

• It boasts an excellent gross rental yield (4.3%).

• It is relatively affordable.

Greenvale is also ideal for investors seeking a balance between capital appreciation and steady rental income.

Brisbane

The median house price in Brisbane is $981,474 as of April 2025, while units have a median price of $694,577. Brisbane’s housing growth rate over the past year has also increased by 8.6%, which reflects the city’s strong market performance.

For investors, houses in Brisbane rent out for an average of $900 a week, yielding an annual rental return of about 4.2% to 4.7%. Units rent for around $600 a week, offering a rental yield of about 5.1% to 5.6%.

Chermside stands out as good investment choice in Brisbane because:

• It boasts the highest growth rate (22.2%) in the city.

• The rental yield is decent at 2.7%.

Chermside is great for investors who want strong capital growth at a low entry point.

Factors To Consider When Selecting An Investment Location

Location affects property value and rental yields. Properties in areas with access to quality schools, transport, and amenities tend to appreciate more and attract higher rental income.

So, keep these factors in mind while selecting an investment location. Here are some other major factors:

Economic Indicators

Economic indicators such as GDP growth rates, employment statistics, and inflation are crucial factors that can determine where you should invest in property.

A thriving economy with rising GDP indicates a healthy property market and a safe bet for investors. In terms of inflation rates, moderate inflation can be a signal of economic growth but high inflation leads to increased interest rates, which in turn affects affordability.

Population Growth and Demographics

Population growth and demographics make up a major indicator of whether a location is investment friendly or not. Increased migration to urban centres can increase housing demand and this drives property values up.

An ageing population, on the other hand, may increase the demand for specific housing types, such as smaller units or assisted-living facilities.

Infrastructure Developments

The Latest developments and infrastructure projects have an impact on property markets. New developments like highways or public transit can make certain areas more desirable.

In addition, government policies and urban renewal projects can also increase property values and attract investments. So, it is always a great idea to invest in locations where infrastructure development is visible.

Property Prices

Understanding property prices is crucial for making smart investment decisions. Most consider only the purchase price of the property as a factor but there are other important aspects to property prices.

Aside from the base price, you should also factor in rental income relative to property prices (your rental yield) to determine investment profitability.

Another important aspect you should consider is the vacancy rate in the market. If the market you’re investing in has high vacancy rates, you want to steer clear, as it signals declining desirability in the area.

On the other hand, low vacancy rates suggest strong demand, potentially leading to higher rental income.

Historical Growth Rate

You should always look at the historical growth rate data of the place you are investing in to see how much reward you can potentially reap.

For example, Perth’s house values have increased by 325% since July 1992. Notably, Fremantle, a Perth sub-region, experienced a 450% rise in house values. So, If you had bought a house for $300,000 in Fremantle in 1992, its value today would be about $1,650,000.

Naturally, investors who capitalised on this growth got terrific returns on their investment. So, keep the historical growth rate in mind while making your investment decisions.

Crime Rate

Crime rates influence property desirability.

A study focusing on Sydney revealed that properties within 0.2 miles of a murder site experienced a 3.9% decrease in value in the subsequent year.

This effect was more pronounced with higher media coverage. In regional Victoria, an increase in crimes was associated with reduced property prices.

These findings tell you how important crime statistics are for those looking to invest in property. High crime rates can deter potential buyers, which leads to decreased property values.

Final Words

Real-estate investment in Australia can be lucrative but choosing the right location to invest in becomes paramount. Sydney, Melbourne and Brisbane each offer unique opportunities, with strong rental yields and capital growth potential in various suburbs.

Beyond market trends, factors such as population growth, infrastructure development, and economic indicators play a crucial role in making a sound investment decision.

So, carefully analyse these elements to better position yourself to meet your long-term financial goals.

And if you are looking for a mortgage to finance your investment plans, call us on 1300 889 743 or enquire online for free.