Over recent years, shifting lifestyle trends and economic factors have reshaped the way Australians approach property investment. A significant change has been the increasing number of investors purchasing properties further away from where they live.
According to the Property Investment Professionals of Australia (PIPA), in 2017 investors in New South Wales typically lived an average of 307km away from their investment properties. By 2024, this had risen to an average of 2,146km. That’s an increase of 550%. Similarly, the average distance away from investment properties in Victoria grew from 233km to 2,392km.
This trend is driven by several factors, including improved infrastructure, rising property prices in major cities and the growing appeal of regional locations.
The appeal of regional locations for investors
Regional locations are becoming increasingly attractive to both property investors and tenants for several reasons:
- Improved infrastructure: Over the past few years, substantial investments in regional infrastructure, including transportation networks, communication technologies and essential services, have made these areas more appealing for both residents and businesses.
According to Infrastructure Australia’s 2024 Infrastructure Market Capacity Report, funding for regional infrastructure increased significantly over 2023 and 2024 – by up to 75% in some areas. This included a focus on transport, digital connectivity and services.
These investments can reduce the traditional disadvantages of regional living, making it a viable option for a broader range of people.
- Affordable property prices: Compared to major metropolitan locations, regional areas offer more affordable dwellings. According to CoreLogic’s January 2025 home value index, the median dwelling value in the combined regions was $656,445 compared to $897,632 for the combined capitals.
This affordability gap may allow investors to purchase larger properties or multiple dwellings, potentially generating higher rental yields and long-term capital growth.
The rise of remote work
The rise of remote work has changed property investment strategies. With more Australians no longer tied to city offices, many have opted to relocate to regional areas where they can enjoy a lower cost of living and a better work-life balance. This has encouraged investors to follow suit, targeting these areas for rental properties.
According to the Australian Bureau of Statistics, around 36% of employed people worked from home in August 2024. While this was down from 37% in August 2023, it was still higher than pre-pandemic levels of 32%.
For investors, remote work trends mean that demand for housing is now more widespread. Properties in lifestyle destinations, coastal towns and satellite cities are increasingly attractive, as renters prioritise space, affordability and amenities over proximity to a central business district.
Dynamics of supply and demand
While regional locations are attracting new investment, other factors are influencing the broader property market, pushing people away from cities.
For instance, in some locations like Victoria, new regulations have made the rental market particularly challenging for investors. These include new thresholds for land taxes and rental reforms that have made it more difficult to manage rental properties.
This trend has contributed to a tightening rental market, reducing available supply and putting upward pressure on rents. For investors willing to hold onto their assets, this could create an opportunity to benefit from rising rental yields, further shaping the property investment environment in those specific locations.
This is already evident in Victoria, where an estimated 20,000 rental homes were lost in 2024 due to investor sell-offs. But, on the other side of the equation, Melbourne is now the number one ranked city as the best place to invest right now, according to PIPA’s investor sentiment survey for 2024. Survey respondents pointed to Melbourne’s good long-term capital growth prospects, among other factors.
Long term strategy
This highlights that despite changing trends, the fundamentals of property investment remain the same: balancing long-term potential with short-term market shifts.
While regional markets offer affordability and strong demand, other factors such as economic and employment opportunities and infrastructure developments also influence the market.
A strategic, well-researched approach can help you capitalise on current trends while positioning yourself for sustained growth. That’s because a long-term view, rather than reacting to short-term fluctuations, is more likely to result in a resilient and profitable property portfolio.
Are you looking to purchase an investment property? Whether you are buying close to home or interstate, Clever Finance Solutions can help you with the process. Book a call with us to discuss your home loan needs.
