Best regional NSW areas for property investment 2024

Looking for the best place to buy investment property in regional NSW?

Here, we round up the latest data and expert insights on how the regional NSW property market is tracking as well as where it may be headed in 2024.

Let’s start with an overview of how the regional NSW property market performed in 2023.

What did the regional NSW property market look like in 2023?

 After dropping -8.1 per cent from their May 2022 peak, CoreLogic data shows regional NSW housing values recovered in 2023, gaining +2.3 percent over January to October. While prices rose, the regional NSW property market’s recovery trailed Sydney, where prices gained +11.6 per cent over the same period.

“After recording stronger growth and milder declines through the recent cycles, housing values across Australia’s regional areas have generally lagged the capital city markets in 2023,” CoreLogic says.

Property expert John McGrath says decreased migration – following a surge in pandemic sea and tree-changers – lead to the softer price recovery. However, regional areas remain attractive to buyers, especially now the benefits of the Covid-era population boost take effect.   

“The impact this trend has had on these regional areas cannot be understated, with unprecedented jobs growth and more money being poured into the regions leading to improved services and infrastructure and greater liveability,” says John.

As homebuyers and investors continue eyeing regional properties, interest has shifted from expensive seaside locations to more rural properties in NSW where prices are lower. 

“Premium regional beach hubs experienced the strongest pandemic gains and the highest falls during the correction,” says John. “This means there is a lot of new value in the most popular regions today, whilst the strongest capital growth is now occurring in more affordable rural and treechange areas of the state.”

John cites real estate data from the northern NSW coast as an example. Median house price in Byron Bay fell -8.7 per cent over the twelve months to June 2023 to $2,875,000, while rising in the inland towns of Clunes (+6.1 per cent, median house price $1,350,000) and Nimbin (+2.3 per cent, median house price $655,000).

CoreLogic’s Quarterly Regional Market Update presents a similar situation. South Coast town Batemans Bay recorded the largest annual decrease in dwelling value (-6.9 per cent) while further north, Nelson Bay recorded a -30.8 per cent decrease in sales activity compared to the previous year. “These markets are now seeing weaker growth conditions after strong gains during the pandemic upswing,” said CoreLogic economist Kaytlin Ezzy. On the other hand, “The flood-ravaged town of Lismore saw the number of home sales rise from a flood affected low base, lifting +16.5 per cent over the year to August.”

The IPN Regional Price Index shows prices in other NSW inland areas have also strengthened. Broken Hill and Far West (+5.2 per cent, median price $201,000), Dubbo (+4.6 per cent, median price $500,000) and Wagga Wagga (+4.2 per cent, median price $500,000) had the highest house price growth of NSW’s regions, while Wagga Wagga (+21 per cent, median price $405,000) topped the list for regional unit price growth in Australia.

Regional NSW property market predictions 2024

Domain has a positive outlook for the regional NSW property market, putting the recent softening of prices in context with the “mega-growth” of Covid, when prices soared +26.4 per cent in the year to March 2022. 

“Growth is slowing in the regions, but we expect it to continue at a healthy rate,” says Dr Nicola Powell, Domain chief of research and economics. “Prices are still very affordable when compared to the cities.” 

John McGrath says investors should consider the regional NSW property market as ripe for potential long-term gains.

“The benefits include the potential for better capital growth in the regions, as well as the higher rental yields that come with more affordable properties,” says John. “Another benefit of buying in regional areas is the opportunity to buy houses, which have historically delivered better capital growth than apartments.”

How are property prices in regional NSW expected to change in 2024?

Experts predict regional NSW property prices will continue to rise in 2024 as demand for housing outstrips supply.

According to PropTrack’s Home Price Index, regional NSW home prices have risen +4.47 per cent over the year to June 2024, to a median value of $729,000. REA Group senior economist Eleanor Creagh says as interest rates remain stable, buyer and seller confidence is fuelling demand and pushing prices up. Eleanor expects home prices to rise further in the second half of 2024, although “they will likely maintain a slower pace through the seasonally quiet winter period, particularly with increasing uncertainty around the outlook for interest rates.”

Growth is expected even as more stock comes onto the market. In CoreLogic’s July 2024 Housing Chart Pack, new listings in regional NSW have increased +6.4 per cent over the year while sales volumes are up +9.1. per cent. With confidence in the housing market at a 2-year high, NAB’s Residential Property Survey (Q1 2024) indicates demand will continue to outweigh the pressures of high interest rates. NAB forecasts NSW house prices to rise +2.7 per cent over the next year and 3.9 per cent over the next two years. 

Domain forecasts 0 to +3 per cent price growth for houses and +1 to +3 per cent price growth for units in regional NSW by the end of FY25. Noting that changing migration policy could see decreased demand for regional real estate, Domain predicts housing affordability will continue to drive homebuyers to cheaper regional markets, particularly those close to major cities or employment hubs.

What are the best NSW regional towns to invest in 2024?

CoreLogic’s Regional Market Update (May 2024) lists these NSW locations as having the highest 12-month growth in dwelling value:

• Central Coast, median dwelling value $925,214, up +9.6 per cent over the past year.
• Muswellbrook in the Upper Hunter Region, median dwelling value $448,919, up +9.4 per cent over the past year.
• Singleton in the Hunter Region, median dwelling value $620,954, up +9.3 per cent over the past year.
• Medowie, a suburb of Port Stephens, median dwelling value $849,745, up +6.8 per cent over the past year.
• Wagga Wagga in the Riverina, median dwelling value $528,953, up +6.6 per cent over the past year.

Domain’s March 2024 House Price Report found these NSW regions had the highest year-over-year house price increases:

• Gunnedah in the North West Slopes Region, median house price $465,000, up +12.3 per cent over the past year.
• Broken Hill in the Far West, median house price $193,500, up +10.6 per cent over the past year.
• Kiama in the Illawarra, median house price $1,500,000, up +10.3 per cent over the past year.
• Hilltops in the South West Slopes, median house price $440,000, up 7.3+ per cent over the past year.
• Cootamundra-Gundagai Regional in the Riverina, median house price $410,000, up +7.2 per cent over the past year.

In PropTrack data, these regional NSW LGAs have the highest annual price growth for units:

• Wagga Wagga, median unit price $413,616, up +5 per cent over the past year.
• Albury, median unit price $340,159, up +4 per cent over the past year.
• Tamworth Regional, median unit price $356,018, up +4 per cent over the past year.
• Wollongong, median unit price $713,389, up +4 per cent over the past year.
• Newcastle, median unit price $678,462, up +3 per cent over the past year.

For the best NSW regional areas to buy investment property, SmartPropertyInvestment lists these suburbs as having the highest average annual rental yields:

• South Lismore in the Northern Rivers, rental yield +9.79 per cent.
• Broken Hill in the Far West, rental yield +9.1 per cent.
• Girards Hill in the Northern Rivers, rental yield +8.3 per cent.
• Moree in the North West Slopes, rental yield +8.02 per cent.
• Cobar in the Western Plains, rental yield +7.43 per cent.

Other regional NSW investment property hotspots

Canstar’s Rising Stars 2024 report used five key metrics – sales volumes, quarterly price growth, vacancy rates, rental growth and infrastructure spending – to pick these top investment hotspots in regional NSW:

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