Author: Ryan Sargant, Julian Nelthorpe, Simon Pascoe, Kylie Edwards, Tadgh O’Brien, David Pascale, Nicole Beviacqua, Matt Morton and Emil Lesa
Regional residential and commercial markets are yielding some of the strongest growth results seen across Australia as we head into 2026. In this article, we share our on-the-ground valuation insights into some of these growth corridors.
Over the past year, the major regional centres of Bunbury and Geraldton have seen significant growth in their residential markets. In part, this is because they are considered more affordable options than Perth by owner-occupiers and investors alike, and supply is short.
In both Bunbury and Geraldton, houses outperformed other residential stock in the last market cycle. However, townhouses and units are starting to become more in demand based on their affordability. That is consistent with the higher demand in the lower quartile of residential assets, which is being driven by first home buyers and other owner-occupiers who are looking for affordable, established properties given the low stock of rental options.
In other southern coastal regions, such as Esperance and Albany, demand continues to grow, driven by lifestyle migration, employment opportunities, and ongoing infrastructure investment. Esperance, in particular, has experienced an increase in demand from residents seeking a coastal lifestyle while maintaining access to employment in surrounding regional centres. Its drive-in, drive-out connectivity to locations such as Kalgoorlie and surrounding mining communities has further supported population inflows and housing demand.
In the industrial sector, regional markets continue to demonstrate sustained growth. Standout locations include towns in the Pilbara such as Port Hedland, Karratha and Newman, where supply remains constrained and demand is strengthening due to mining services requirements. Demand continues to be driven by owner-occupiers. However, investors are now re-entering the market, continuously seeking net yields in the vicinity of 10%. This reflects the underlying strength of the region’s mining services, iron ore and gas sectors, which continue to support tenant demand and rental growth. Importantly, this level of economic activity is also flowing through to the residential market, contributing to increased housing demand and upward pressure on rents and values.
A similar dynamic is evident in Broome, although it is more driven by tourism. Demand across both industrial and residential assets is being supported by a combination of tourism activity and government sector influence. Recent market activity has highlighted the depth of demand, with new residential land releases experiencing rapid absorption, in some cases selling out within a single day.
In Whyalla, the government is trying to sell the biggest local employer – OneSteel. Despite the uncertainty in the outcome, investors are coming in on the expectation that the steelworks will transfer and be expanded, as well as predictions defence and space industry activity will continue, with population growth to follow. In fact, in 2022 the City of Whyalla estimated, ‘[the] pipeline of major projects that are at or near development assessment will conservatively create 4,000 construction-related jobs in Whyalla with around 810 ongoing full-time jobs.’
The investor interest in Whyalla has seen residential property achieve a 14% growth rate, which has spiked to 50% in some instances. Yields have also firmed from 9% to 7% over the last year.
Areas in the Limestone Coast, including Robe, and the Eyre Peninsula are also seeing modest growth. Buyer advocates are actively competing for houses in these areas, as they are offering yields of 6% to 7%.
Dubbo and the regional area surrounding it are now in the heart of New South Wales’ renewable energy zone. The investment pouring into renewable projects in the area is bringing many workers to the local towns and putting pressure on housing. Dubbo is also a designated regional area for migration purposes, which is contributing to population growth.
The associated growth in demand for Dubbo housing has led to a significant spike in property values under $750k, driven largely by demand from out-of-town investors. Rental returns in this sub-section of the market are sitting at around 5% and underlying asset values have risen approximately 16% in the past year. More expensive properties, including rural lifestyle properties, are stable in comparison.
For some years, property in Wellington had remained stagnant because of the stigma from association with the local correctional facility. However, the proximity of several renewable projects has changed that situation and both underlying value and rents are now at high levels in the town.
Local investors are also active in the smaller towns of Dunedoo and Mendooran, despite the longer commute to Dubbo.
There continues to be demand for commercial assets along the Newell Highway, including petrol stations, because of the active renewables and agriculture industries.
With Cairns tourism and agriculture sectors performing well, the local economy has seen strengthened performance across all sectors. The Cairns commercial market is generally short on supply and that’s driving market growth particularly in the industrial sector. With extremely low levels of existing stock and very little designated land for industrial development, industrial land values in Cairns are currently in excess of $600/sqm for industrial sites under 2,000 sqm. Owner-occupiers are still driving demand for industrial, retail and hospitality assets. Potentially, Cairns is becoming land-locked with heavy urban growth to the north over the last two decades now limiting any future development southward.
Townsville is also a well performing regional hub with a strong commercial market attracting interest from both owner-occupiers and investors alike. Agents in Townsville are reporting declining stock in recent months with the most recent interest from investors indicating 7.00% yields are being sought. However, early indicators are becoming evident of a gap between purchaser and vendor expectations for investment grade assets, with vendors still chasing yields that have been achieved over the last 12 to 24 months between 6.25% and 6.75%. In general terms, commercial and industrial rental rates have increased slightly over recent years and months, though at a rate far below the rate of increase applicable to construction costs, which continues to inhibit new supply. This is providing a level of support for existing property values.
Unlike Cairns, Townsville does not have significant availability constraints as there is an availability of industrial land and englobo residential developments for future growth. Regardless of the availability though, strong commodity and mining sector activity in the region along with government infrastructure has contributed to a strong local economy with increased demand driving strong growth in industrial land $ rates/sqm. Sites that were typically $100 to $120 /sqm are now achieving $150 to $180 /sqm for allotments at entry level between 2,000 to 4,000 sqm in size.
In Ballarat and Bendigo, there are signs of positive change in residential market sentiment. Market activity is driven by both owner-occupiers and local and interstate investors looking for affordable options and lifestyle changes. Competition is now heightening, and buyer advocates are regularly active in the markets.
Lower quartile residential properties are appealing to the first home buyer and investor markets alike, and houses in the medium range of $500k to $700k are also performing well. Vacant land is similarly popular, particularly for lots of 350 sqm or more.
Mildura is another regional city performing strongly, thanks to local population demand for housing and high levels of interest in comparably affordable housing stock from east coast investors. Rent returns are currently up to 5%, with even a two-bedroom unit in a less desirable neighbourhood commanding a weekly rent of $400.
Any type of property under $700k is competitively pursued. For example, a property in Ellswood Crescent in Mildura sold in 2024 for $425k. A year later, similar properties in the same street sold for $550k, $591k and $632k. In another example of rapid growth in this mid-market segment, a three-bedroom, two-bathroom 1980s brick house sold in September 2024 for $463k and resold a year later in largely the same condition for $606k.
In the residential market, the greater Hobart region is experiencing positive market sentiment following the announcement that the Hobart stadium project is going ahead. Demand is being driven by local and relocating interstate owner-occupiers, as well as by buyer advocates acting for interstate investors looking for strong returns.
In Launceston and in the North West from Devenport through to Wynyard, there are similar market conditions. These areas are also attracting many mainlanders looking for lifestyle change (supported by remote work) and retirees looking for a sea change.
Mid-tier properties are in good demand and are performing best across these three markets, which typically sell for $750,000 or less.
The rental markets within Greater Hobart, Launceston and the North West are also performing well, with rent increasing due to limited rental stock.
There is a high level of supply of vacant land throughout the Greater Hobart, Launceston and the North West regions, which is staying on the market for longer and is leading to some price discounting. This trend is likely to be influenced by higher build costs.
There has been a decrease in residential construction valuations being requested, which suggests new residential construction, particularly within the Greater Hobart region, is also being impacted by higher construction costs.
ryan.sargant@opteonsolutions.com
julian.nelthorpe@opteonsolutions.com
simon.pascoe@opteonsolutions.com
kylie.edwards@opteonsolutions.com
tadgh.obrien@opteonsolutions.com
david.pascale@opteonsolutions.com
nicole.bevilacqua@opteonsolutions.com
matt.morton@opteonsolutions.com
DISCLAIMER
This article is produced by Opteon Property Group Pty Ltd. It is intended to provide general information in summary form on valuation related topics, current at the time of first publication. The contents do not constitute advice and should not be relied upon as such. Formal advice should be sought in particular matters. Opteon’s valuers are qualified, experienced and certified to provide market value valuations of your property. Opteon does not provide accounting, specialist tax or financial advice.
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