Some of Australia’s regional markets offer better returns than metropolitan areas, but investors should avoid high-risk locations.

MCG Quantity Surveyors’ analysis reveals that affordable regional markets often outperform inner-city suburbs. According to MCG Managing Director Mike Mortlock, the Pilbara in Western Australia has house yields of 9.85% and unit yields of 13.12%, driven by rental demand from the growing mining sector. Campaspe Shire, between Bendigo and Shepparton in Victoria, shows house yields of 6.23% and unit yields of 11.28%. In Queensland, Outback South and Bowen Basin regions have house yields of 9.07% and unit yields of 8.88%.

Mortlock notes that strong yields are common in areas with active mining and agriculture sectors. However, he warns of the risks in markets heavily influenced by one industry, as capital growth may not match that of locations closer to capital cities. Balancing high yields with potential for capital growth is essential, emphasising the need for a diversified investment strategy that includes both regional and metropolitan markets.

Hotspotting founder Terry Ryder supports Mortlock’s view on the risks of investing in mining towns and areas dominated by a single industry.