The Rise of Secondary Cities: Housing Trends Pointing to Australia’s Next Growth Markets

For decades, the Australian property narrative was dominated by a simple mantra: invest in Sydney and Melbourne. But a profound shift is underway. Soaring prices, remote work flexibility, and a quest for lifestyle are fuelling one of the most significant housing trends Australia has seen—the powerful rise of secondary cities.

Savvy investors are looking beyond the traditional capitals, discovering markets that offer compelling affordability, strong rental yields, and genuine growth potential. If you’re wondering where the next decade of property growth will be forged, it’s time to explore Australia’s new frontier.

Let’s dive into the key housing trends Australia is experiencing and identify the secondary cities poised to outperform in the coming years.

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The Mega-Trends Fueling the Regional Boom

This isn’t a fleeting moment; it’s a structural change driven by several powerful forces:

1. The Remote Work Revolution (It’s Permanent)

The pandemic proved that for millions, the daily commute is optional. The Australian Bureau of Statistics (ABS) reports that a significant portion of the workforce now operates under hybrid arrangements. This newfound flexibility has untethered professionals from expensive CBD postcodes, allowing them to prioritise space and lifestyle.

2. The Great Affordability Divide

The math is simple. With the median house price in Sydney exceeding $1.4 million, even well-paid professionals are looking elsewhere. Secondary cities offer a realistic path to homeownership—a larger house on a bigger block, often for half the price. This fundamental value proposition is driving a steady stream of demand.

3. Government Investment & Infrastructure Boom

Billions of dollars are being poured into regional infrastructure, making these areas more connected, liveable, and economically vibrant. From major hospital upgrades and university expansions to new rail links and airport upgrades, these projects create jobs and attract long-term residents.

4. The Lifestyle Re-evaluation

After successive lockdowns, Australians are placing a higher value on lifestyle. Access to nature, shorter commutes, a stronger sense of community, and a generally slower pace of life are powerful draws that secondary cities offer in abundance.

🔗 How much can you afford? Check out our Investment Property Calculator (internal link)

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Australia’s Secondary Cities to Watch: The 2024-25 Outlook

Based on these housing trends Australia is witnessing, several secondary cities are standing out as prime candidates for sustained growth.

1. Newcastle, NSW: The Smart City Rising

Newcastle has brilliantly transformed from an industrial port into a vibrant, knowledge-based economy.

• Growth Drivers: Home to the University of Newcastle and a booming tech scene, it attracts a young, skilled workforce. The Newcastle Airport expansion is set to boost connectivity significantly.
• Market Outlook: Strong demand from Sydney expats and locals, with robust rental yields and steady capital growth expected to continue.

2. Geelong, VIC: Melbourne’s Clever Cousin

Geelong is no longer just Melbourne’s sleepy neighbour. It’s a cultural and economic hub in its own right.

• Growth Drivers: The National Disability Insurance Agency (NDIA) headquarters has brought thousands of jobs, and the city is a key beneficiary of the Victorian government’s infrastructure spend. The fast rail link to Melbourne solidifies its appeal.
• Market Outlook: A diversified economy and relative affordability make it a resilient and promising market for investors.

3. Sunshine Coast, QLD: The Lifestyle Powerhouse

The Sunshine Coast has evolved beyond a holiday destination into a thriving regional centre.

• Growth Drivers: Major projects like the Sunshine Coast Airport expansion and new health precincts are creating employment hubs. Its unparalleled lifestyle continues to draw families and remote workers from the southern states.
• Market Outlook: Population growth is soaring, consistently above the national average. This underlying demand pressures both rental vacancies and property prices, pointing to strong long-term growth.

4. Adelaide, SA: The Affordable Capital

While a capital city, Adelaide often plays by the rules of a secondary market with its affordability and tight-knit community feel.

• Growth Drivers: A burgeoning defence and space industry is bringing high-tech jobs and investment. Its famous food, wine, and festival culture offer a world-class lifestyle at a fraction of the cost.
• Market Outlook: Having experienced significant growth, Adelaide still represents relative value and is characterised by a tight rental market, making it attractive for investors seeking yield.

📌 Deeper Dive: Our Regional Market Research Report on the Sunshine Coast (internal link)

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How to Spot the Next Growth Market: An Investor’s Checklist

Not every regional town will boom. When conducting your research, look for these key indicators:

• Economic Diversification: Avoid towns reliant on a single industry. Look for hubs with healthcare, education, advanced manufacturing, and professional services.
• Infrastructure Pipeline: Check state and local government budgets for upcoming projects. New trains, roads, and hospitals are a beacon for future growth.
• Population Trends: Use ABS data to track which areas are experiencing strong and sustained population growth, particularly in the key 30-49 age demographic.
• Yield & Vacancy Rates: A tight rental market (low vacancy rates below 1%) combined with healthy yields (above 4.5%) indicates strong demand and cash flow potential.
• Local Amenity: People move for lifestyle. Look for cities with good cafes, restaurants, schools, and access to natural assets like beaches or parks.

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The Risks & Considerations

While the opportunity is significant, investing in emerging markets requires a different approach.

• Market Volatility: Some smaller markets can be more susceptible to economic downturns. Stick to larger, more diversified regional centres.
• Lower Liquidity: It may take longer to sell a property in a regional area compared to a capital city if you need to exit quickly.
• Performing Due Diligence: It’s crucial to understand the local market dynamics. What drives employment? What is the supply and demand balance?

🔗 Mitigate your risk: Why Partnering with a Fund Can Unlock Regional Growth (internal link)

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Ready to Explore the Next Wave of Growth?

The housing trends Australia is experiencing today are creating a once-in-a-generation opportunity in our secondary cities. For investors, this represents a chance to capitalise on markets with strong fundamentals and exciting growth trajectories.

At Real Estate Science Fund, we use data-driven research to identify and invest in the most promising growth corridors across Australia. We believe the future is bright beyond the big capitals.

Want to know which markets our research is pinpointing for 2025? Explore our current investment opportunities or Speak with our team for a personalised consultation.