Best Cities in Australia for First-time Property Investors

Best Cities in Australia for First-time Property Investors

 

Starting your journey in property investment can be both rewarding and challenging. When buying investment property, choosing the right city is crucial for maximising returns and ensuring long-term success.

If you’re a first-time investor, cities like Sydney, Melbourne, Adelaide and Brisbane offer unique opportunities that align with some of the best property investment strategies.

Sydney: a high-demand market with long-term growth potential

Sydney’s property market remains highly competitive due to strong demand, limited housing supply and consistent long-term capital growth. As a global business hub, it attracts a steady influx of residents and investors, while geographical constraints and strict planning regulations restrict new housing supply. These factors have helped drive sustained price appreciation, making Sydney a key market for property investors.

Sydney’s median house price in December 2024 was $1.415 million, according to the Australian Bureau of Statistics – 0.4% down year-on-year from $1.421 million in December 2023. This slight downturn in price makes Sydney an interesting option for first-time investors who are looking for stable, long-term capital appreciation in a historically strong market.

Why Sydney may work for first-time investors:

  • Established market stability: Sydney has a history of consistent capital growth, making it a solid choice for those seeking long-term value.
  • Strong rental demand: With a growing population, rental properties in Sydney remain in high demand.
  • Off-market opportunities: A specialist buyer’s agent in Sydney can help investors access off-market properties for better deals.

Melbourne: a competitive market with strong rental demand

Melbourne’s median price was $825,000 in December 2024, which was 5.0% lower than the year before, according to the Australian Bureau of Statistics. This price decline presents a strategic entry point for first-time investors looking to enter the market before potential future growth.

Why Melbourne may work for first-time investors:

  • Affordability compared to Sydney: Melbourne’s lower median price makes it an appealing alternative to Sydney.
  • High rental demand: Melbourne has a significant student and professional population, ensuring the potential for steady rental income.
  • Diverse property options: A specialist buyer’s agent in Melbourne can help secure investment properties in high-growth suburbs.

Adelaide: affordable entry with strong yields

Adelaide is gaining traction among property investors due to strong economic performance, significant population growth and major infrastructure projects. The city’s median house price rose 12.1% in the year to December 2024, according to the Australian Bureau of Statistics, yet remains more affordable than Sydney and Melbourne. Upcoming developments, such as transport upgrades, enhance liveability and future demand. Although rental yields declined slightly over the year to December 2024, they remain competitive, making Adelaide attractive for long-term investors. With limited housing supply and consistent demand, experts predict continued property value growth.

Why Adelaide may work for first-time investors:

  • Lower price entry: Adelaide is more affordable than Sydney or Melbourne.
  • Rental yield trends: Adelaide yields declined from 3.97% to 3.66% during 2024, but still remain For first-time investors, this presents an opportunity to secure property in high-demand rental areas where rental returns are still strong, particularly in emerging suburbs with limited supply.
  • Growth potential: A buyer’s agent in Adelaide can help investors secure high-potential opportunities in emerging suburbs before prices rise further.

Brisbane: affordable and rapidly growing

Brisbane’s median house price jumped 11.4% to $925,000 during 2024, according to the Australian Bureau of Statistics, in part because of Brisbane’s strong appeal to investors. A combination of major infrastructure developments, such as Brisbane Metro, Brisbane Arena, Brisbane Live Precinct and Coomera Connector, as well as increasing interstate migration and strong employment growth, has driven significant price appreciation in Brisbane. The city’s appeal is further strengthened by the upcoming 2032 Olympics, which is expected to boost local property demand and enhance economic growth.

Why Brisbane may work for first-time investors:

  • Strong growth forecast: Brisbane’s property market has experienced consistent growth in recent years, and forecasts for 2025 remain positive. According to KPMG’s Residential Property Market Outlook, house prices in Brisbane are projected to rise by 3.1% in 2025 and6% in 2026.
  • Impressive rental yields: Brisbane experienced slight rental yield compression in 2024, from 3.94% to 3.61%, according to CoreLogic, but the city remains a highly attractive option for investors seeking both capital growth and rental returns.
  • Buyer’s advocate can secure better deals: A Brisbane buyer’s advocate can help investors find high-performing properties.

Which city is best?

Each city presents unique advantages. The best property investment location for you will depend on your unique financial circumstances, strategy, goals and risk profile. First-time investors should do comprehensive research when choosing a location. Alternatively, you can work with a property investment agency so you navigate the market effectively.

At BFP Property Group, we specialise in assisting first-time investors to secure high-quality properties. Whether you’re interested in off-market properties, building an investment portfolio or maximising rental yields, our team can help. Contact BFP Property Group today to start your property investment journey with expert guidance.