Where should I buy my next investment property in Australia?

If you had $1 million to spend on property investment in Australia today, where would you invest it?

What location would you buy in, and why?

And what about if you only have $500,000 to invest? Where is the best place to buy an investment for this budget?

What are the top 10 hotspots now that interest rates are starting to come down?

And by the way… is real estate still a good investment in Australia, now that housing has become so expensive and with all the tax, economic, and geopolitical problems we're experiencing?

These questions were recently asked of me by a journalist, and I can understand why - they are common questions investors are asking today and they make great headlines for articles.

Everyone would like to know how to find the best property investment locations or Australia's best-growth suburbs.

You know... that special location that will outperform the averages and the right property in that location will be the stepping stone to a substantial property empire.

But I’m afraid my response disappointed the journalist because I didn’t answer her questions.

Now I wasn’t surprised by the request – I have found that most property investors start their journey by trying to choose a top location (because they think that's the best place to buy an investment property) or find a property that will make a great investment.

However, when you look at the results that most investors achieve by asking these types of questions, it makes little sense to think about property investment from this angle.

So if you want to outperform the average investor and develop financial freedom through property investing, don’t start by selecting a location, or looking for that ideal property.

Here’s how to do it instead.

Buying property as an investment

You see…property investing is a process, not an event.

Things have to be done in the right order, and selecting the property comes right at the end of the process.

The property you will eventually buy should be the physical manifestation of  a sequence of questions you will need to ask and answer, and a series of decisions you’ll need to make before you even start looking at locations.

Long before we talk about a property or the right location with our clients at Metropole, we look at factors including their age, their timeframes, and the desired end results.

In other words, what do they really want the properties to do – are they looking for cash flow, capital growth, or a combination of both.

And that’s because what makes a great investment property for me is not likely to be the same as what would suit your investment needs.

So it all starts with helping our clients formulate a Strategic Property Plan which takes into account their surplus cash flow position, their risk profile (for example would they consider undertaking renovations or small development), whether they currently own a home or are wanting to buy a new home or upgrade their existing home in the future, if they are going to earn more income in the future, or if they’re going to decrease their family income because they’re having a baby, how many other investment properties they own, where they are located and how they are performing plus 35 other considerations.

So my first recommendation to anyone asking where to invest is to sit with an independent property strategist to formulate their plan.

It’s just too difficult to do on your own, and I’ve found most investors tend to be too emotionally involved to see their situation objectively.

The benefits of formulating such a plan include:

It will help you define your financial goals.

• You’ll discover whether your goals are realistic, especially for your time frame.
• You’ll find out what you’ve done right and what you’ve done wrong along your financial journey so far and what you can do about it.
• You’ll be able to measure your progress towards your goals and whether your property portfolio is working for you, or if you’re working for it.
• Your plan will help you identify risks you hadn’t thought of.

Your Strategic Property Plan should contain the following components:

1. An asset accumulation strategy
2. A manufacturing capital growth strategy
3. A rental growth strategy
4. An asset protection and tax minimisation strategy
5. A finance strategy including long-term debt reduction and…
6. A living off your property portfolio strategy

By following a documented plan, the real benefit is that you’ll be able to grow your wealth through your property portfolio faster and more safely than the average investor, without making any more costly mistakes along the way.

Three important parts of your investment equation

When you invest in property, there are really only three major levers you can pull:

1. Your budget – and that is usually determined by the banks.

2. Location, and you can’t afford to compromise on that.

3. The right property in that location.

And unless you have an unlimited budget, which applies to very few of us, investors usually need to compromise on at least one of the above.

But the question some potential investors are asking, considering all the mixed messages in the media, is:

Is real estate still a good investment?

There are still many economic challenges ahead, yet I see the current market offering a window of opportunity for property investors with a long-term focus.

You see…until all the bad news settles down, many discretionary buyers will sit on the sidelines, waiting till all the news becomes clear and the messages are positive.

Of course, that will only occur when property prices have started to rise, auction clearance rates increase, and the media keeps telling us how much money investors and homebuyers have made out of their homes

So I currently see a window of opportunity, not that I suggest you try and time the market- this is just too difficult, but if the market hand you an opportunity like this why not take advantage of it

Taking advantage of this stage of the property cycle has created significant wealth for investors in the past.

Moving forward, demand is going to outstrip supply for some time to come as we experience high levels of immigration at a time when we’re not building anywhere near as many properties as we require.

At the same time, the cost of construction of new dwellings will keep increasing and developers will only commence new projects if they are financially viable and currently new projects will need to come on line at considerably higher prices than the current market prices.

We are also going to be experiencing a prolonged period of strong rental growth - the rental crisis will only worsen further, with no end in sight.

Now I'm not suggesting taking advantage of tenants, what I'm suggesting is to recognise there is currently a problem (lack of rental accommodation) and provide a solution.

And rather than trying to hunt down a bargain , focus on buying an investment-grade property in an A-grade location because these types of properties are in short supply but are still selling for reasonably good prices… Plus they’ll hold their value far better in the long term.

While it might feel counterintuitive to buy at a time when there are so many mixed messages in the media, you can benefit from less competition, low consumer sentiment, minimal downside risk and minimal risk of oversupply.

To many, liveability will mean a combination of:

1. Proximity – to things like parks, shops, amenities, and good schools
2. Mobility – access to good public transport (even though this may be less important moving forward) or a good road system
3. Access to jobs

What makes a worthwhile investment property?

This is very difficult to answer because it all depends upon you – what do you want out of your property investment?

It’s impossible to say that any particular location is perfect for everyone.

If you have been following my articles, podcast, or videos, you’d know that I believe residential real estate is a high-growth, relatively low-yield investment, and that’s why I would only be looking for locations that are likely to outperform the averages with regard to capital growth in the long term.

But I do recognise that most investors need sufficient cash flow to service their debt, so yield is an important factor to be taken into account when choosing a location.

When selecting a location, I would initially start by eliminating locations.

For example, I would not be investing in regional Australia or in the smaller capital cities.

Now I know many of these locations have performed well in the last couple of years and there’s no doubt that some better-performing regional locations or certain suburbs in our small capital city will outperform the poorer-performing suburbs of our three big capital cities.

But when I suggest you should only consider investing in Australia’s big three capital cities, I’m also saying that it’s important to be very selective in choosing suburbs in these cities – investment-grade suburbs that are likely to outperform.

Rather than looking in the rear vision mirror at what has already happened, I look for leading indicators of what’s likely to happen in the future.

• Also read:Melbourne property market forecast for 2026 | Is it a good time to invest in Melbourne?
• Also read:Latest Property Price Forecasts Revealed. Australian Property Market Outlook 2026: Where To Now After The Rate Rise.
• Also read:Sydney property market forecast for 2026. Is it a good time to invest in Sydney?
• Also read:Brisbane Property Market Forecast [2026] – What’s Ahead & Where to Invest
• Also read:This week’s Australian Property Market Update – Latest Data, State by State March 24th 2026

So I look for locations where there is going to be strong economic growth, which will lead to wage growth and eventually population growth.

But more than that I look for an affluent demographic who will be able to and prepared to, pay more to buy or rent in these suburbs.

The fact is, I don’t like to fight the big trends.

Other important drivers of capital growth include supply and demand, infrastructure, livability, and amenity.

Over the years, I’ve noticed that experienced investors find it easier to choose a location – they’re not as emotionally attached to locations, as they’ve learned from their mistakes.

On the other hand, many beginning investors want to invest close to where they live, in suburbs they’re familiar with, or where they’d like to holiday or eventually retire.

Obviously, these are emotional reasons to choose a location, rather than basing decisions on data.

So the first question to ask yourself is:

"How far are you willing to invest from home?"

Clearly, the further you are prepared to consider, the better your potential returns because you’ll have the whole of Australia open to you, but if you’re only prepared to invest in your own backyard, your choices will be much more limited.

While there are around 3,800 statistically reliable suburbs nationally, in my mind, very few of these make investment-grade suburbs, ones that will deliver wealth-producing rates of capital growth over the decades.

How to choose an investment property in Australia?

I recommend looking for an area with a long, proven history of strong capital growth that is likely to continue outperforming the average.

Now that’s very different from a “hot spot” or the next big thing many beginning investors chase.

And as you dig into the data, you’ll find that not all land is created equal.

Some suburbs will be more popular than others, some areas will have more scarcity than others, and over time, some land will increase in value more than others.

And you’ll find that top performance has a lot to do with the area's demographics.

These suburbs tend to be those where a large number of owner-occupiers desire to live because of lifestyle choices or the offer.

I look for suburbs where wages (and therefore disposable income) are increasing above average.

These will either be:

1. Discretionary locations

These are the most expensive locations in our capital cities – the “established money” locations where most residents have lived for a long time, and many have paid off their home loans years ago.

In general, these locations are the established inner and middle ring suburbs of our capital cities or suburbs close to water.

Over the long term, this segment of the market outperforms the other sectors.

Of course, not everyone can afford to buy at this end of the market, so strategic investors often look to invest in…

2. Aspirational locations

These are the upper-middle-class areas and gentrifying locations of our big cities.

These are the suburbs many affluent millennials aspire to move to as they enter the family-formation stage of their lives.

When this wealthier demographic moves into a suburb, it means locals are able and prepared to pay a premium to live there, putting a financial floor under your investment property.

As you wander through these suburbs, you’ll see a changing neighbourhood with new developments and infrastructure improving the quality of services for the residents as well as driving economic and job growth.

On the other hand, I would avoid investing in the more affordable locations as this end of the property market underperforms over the long term with regard to capital growth and rental growth because many of the owners are young families who have stretched themselves to their financial limits and are often only a week or two away from broke.

What to look for when investing in property?

If Covid-19 taught us anything, it was the importance of living in the right type of property in the right neighbourhood.

In our new “Covid Normal” world, people will pay a premium for the ability to work, live and play within a 20-minute drive, bike ride or walk from home.

They will look for things such as shopping, business services, education, community facilities, recreational and sporting resources, and some jobs all within 20 minutes reach.

Residents of these neighbourhoods have now come to appreciate the ability to be out and about on the street socialising, supporting local businesses, being involved with local schools, and enjoying local parks.

But it’s not only the location that’s important.

While I believe that 80% of your property's performance is related to its location, the other 20% or so is related to buying the right property in that location.

Even in the best suburbs, there are some properties I would avoid – they just don’t make good investments and others I would be keen to have in my portfolio.

In general, there are 3 types of property:

1. A-Grade homes and “investment grade” properties are the type of assets you want to own, and the type of properties were great tenants want to live, not because they need to, but because they want to and are prepared to pay extra to live there.
   These are not just houses but also family-friendly apartments in great neighbourhoods.
2. B-grade properties still have a lot going for them, and during hot property markets like we are currently experiencing they still perform well, but their second location within their suburb or the less-than-perfect attributes of these properties mean they will slump more in downtimes when buyers and tenants are more choosey.
3. C-grade properties – these are to be avoided unless they’re in a great neighbourhood and your intention is to demolish the property and replace it with something more appropriate for the location.

Here are some of the factors to look for when selecting an investment-grade property:

• I’m a big believer in buying property below its intrinsic value – that’s why I avoid new and off-the-plan properties, which generally attract a premium price tag.
• I also look for properties with a high Land to Asset ratio - but remember apartments have an attributable land value underneath them.
• I love properties with a twist. Your investment must have something unique, special, different, or scarce – some ‘X-factor’ that makes it stand out from its neighbours – in order to land on my shortlist.

And for those who can afford it, I’d recommend buying a property where they can manufacture capital growth through renovations or redevelopment.

Rather than asking where I should invest or what sort of property I should buy, the questions you should be asking are:

• What do I want to achieve from my property portfolio?
• What do I need to do to get those results? And…
• Who do I need on my team to help me achieve the financial freedom I want with minimal risk?

Top investment property locations in Australia

At the end of the day, successful property investment isn’t about chasing the latest hotspot or following the crowd.

It’s about making strategic, well-informed decisions that align with your personal goals, financial position, and risk profile.

And that’s where many investors come unstuck - they rely on generic advice when what they really need is a tailored plan.

Every investor’s situation is different. The right location for you will depend on a range of factors, including your borrowing capacity, stage of life, cash flow requirements, and long-term wealth objectives. What works brilliantly for one investor could be completely wrong for another.

That’s why it makes sense to step back and get a clear, personalised strategy before making your next move.

If you’re serious about building wealth through property, I’d strongly recommend having a chat with one of Metropole's Wealth Strategists.

They’ll take the time to understand your individual circumstances and help you cut through the noise, identify the right opportunities, and avoid costly mistakes.

With the right guidance, you can navigate the complexities of today’s property market with confidence and put yourself in a position to achieve your long-term financial goals