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A recent report has identified the top 20 suburbs for property investor activity across Australia, but brokers said the real opportunity lies elsewhere, with early signs of a market rotation back to the east coast.
The MCG Investor Index, commissioned by MCG Quantity Surveyors and produced by Suburbtrends, was shared with API Magazine and singled out individual suburb areas (SA2s) offering strong rental yields, affordability, socioeconomic stability, and strategic location.
The index reflects continuing investor interest in markets that combine value with returns, reinforcing the resilience of the national rental investment landscape.
(Source: MCG Quantity Surveyors)
However, according to brokers, the areas making headlines may have already peaked.
Home Loan Experts CEO Otto Dargan said: “It’s tempting to look at a list of investor hotspots and assume the smart money is already there – but that’s often the problem. By the time a suburb makes a top 20 list, it’s probably had its run.
“SA and WA have been investor darlings for the last few years – and with good reason. Perth’s affordability and Adelaide’s steady fundamentals offered rare value when the east coast was overcooked. But the rotation is already underway. Sydney and Melbourne are the comeback kids in 2025, and early investors are moving before the headlines catch up.”
According to Dargan, the same signs are emerging as seen in Perth in 2019.
“Everyone suddenly loves the markets they wouldn’t touch four years ago. Adelaide’s getting airtime because of its past performance, not because forward returns stack up,” he said.
“Meanwhile, Melbourne’s quietly become one of the cheapest capital city markets on a price-to-income basis. You can pick up a townhouse for under $600k in decent inner-middle ring areas – cheaper than regional QLD, with better infrastructure, schools, and long-term demand drivers.”
Dargan said that while there’s still value in Western Australia and South Australia, he suggested caution in the assumption that growth will continue in those states.
“Investor yields look strong on paper, but the capital gains outlook is flattening. Smart investors are now watching for the early signs of east coast resurgence. That’s where the next 20 per cent gains could come from – especially if the RBA continues cutting,” Dargan said.
“We’re already seeing it in our loan book. More interest in Sydney and Melbourne. More investors thinking long-term, not just chasing a yield pop. That’s a shift worth noting.”
Jonathan Preston, senior mortgage broker at Home Loan Experts, echoed the sentiment: “South Australia has already had a massive run-up over the past few years, and I wouldn’t expect high forward returns from here.
“Five years ago, SA was dead and cheap – now everyone wants a piece. It’s too much rear view mirror thinking. It’s starting to feel like Perth all over again.
“I remember telling people four years ago to buy in Perth and they looked at me like I was mad. Now it’s the darling of every investment headline. I think we’ll see the same thing happen again, but this time it will be Sydney and Melbourne that lead the way, while everyone turns their nose up at SA and WA.
“In my opinion, forward returns for SA and QLD are likely to be closer to 3 per cent annually over the next five to ten years. Sydney and Melbourne could be more like 6 to 10 per cent per annum in that same window. Once the east coast runs, it’ll be another five to ten years before SA and WA can take the spotlight again.
“Melbourne, in particular, looks dirt cheap when you compare it to regional areas. Even in Sydney, you can still buy townhouses for under $500k. The value gap is real.”
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