How do regional markets compare to capital cities for price growth?

Buying a home outside a capital city can offer more space, a different lifestyle and potentially greater affordability. But how do property prices in these regional markets compare with those in the nearby capitals?

Analysis by Ray White Group Chief Economist Nerida Conisbee has found that regional housing markets near Sydney, Melbourne, Adelaide and Perth have, on average, outperformed their neighbouring capitals over the past decade.

Ms Conisbee compared median house price trends in selected regional markets with their nearest capital cities between June 2016 and March 2026.

However, she found that proximity to a major city wasn't the only factor influencing property prices.

How different regions have performed

In Victoria, Geelong, the Mornington Peninsula and Surf Coast have all outperformed Melbourne over that 10-year period, although their growth has been relatively modest compared with regional markets in some other states.

In Western Australia, Mandurah has benefited from its relative affordability and proximity to Perth, while Busselton and Margaret River have been supported by lifestyle demand and the state's broader economic strength.

Queensland presents a different picture. The Gold Coast and Sunshine Coast have benefited from population growth, interstate migration and lifestyle demand, keeping their performance broadly in line with Brisbane's strong growth.

Meanwhile, Sydney's nearby regional markets have experienced mixed results. The Central Coast and Wollongong have performed strongly and reached new price highs, while the Southern Highlands has softened more noticeably from its peak.

Why the nearest capital still matters

Despite their differences, Ms Conisbee found that regional markets generally follow the broader direction of their nearest capital city.

That means strong conditions in a capital city can support nearby regional markets, while weaker conditions can also flow through.

However, factors such as affordability, population growth and lifestyle appeal can influence how individual regional markets perform.

For prospective buyers, the takeaway is that regional property markets shouldn't be treated as interchangeable. Understanding local conditions is important, even when two areas are relatively close together.

Buying outside a capital city? We can help you understand your borrowing power before you start exploring different regional markets. Let's discuss your plans.