Should You Invest in Metropolitan Property Markets?

Investing in property within Australia’s major metropolitan areas is a popular strategy—primarily due to the high demand for housing, strong infrastructure, and long-term capital growth potential. Suburbs closer to the CBD often outperform regional areas in terms of value appreciation over time, thanks to proximity to jobs, universities, public transport, schools, hospitals, and lifestyle amenities.

However, with these advantages come higher barriers to entry. Metropolitan properties usually come with steeper price tags, requiring larger deposits and higher upfront costs. If your investment property is vacant for any period, you’ll also need to have sufficient cash flow to cover the mortgage until a tenant is secured.

The High Entry Point of City Property Markets

City-based investments generally demand a greater financial commitment from the outset. In many cases, rental income from these properties may not fully cover ongoing costs such as mortgage repayments, rates, maintenance, and insurance. This means investors may need to ‘top up’ their loans each month to bridge the shortfall.

While this may seem like a downside, there’s a reason many still opt for capital city investments.

Why Investors Still Choose Metropolitan Locations

Property investment is a long-term wealth-building strategy. And choosing the right suburb and property type at the beginning plays a significant role in how well your investment performs.

Yes, price matters. But so do other critical metrics like population growth, infrastructure plans, tenant demand, and rental yield. Capital cities remain attractive because they typically deliver:

• Higher long-term capital growth
• Greater economic activity and job availability
• Stronger rental demand from a growing population
• Improved infrastructure and transport options

To put this into context, ABS data from 2012 showed the NSW major cities were home to 5.39 million people, compared to 1.86 million across inner and outer regional areas—a stark contrast that highlights the scale and demand found in metropolitan markets.

Metropolitan vs Regional: It’s Not One-Size-Fits-All

Both metro and regional property markets come with their own strengths and risks. Regional areas may offer higher rental yields and lower purchase prices, but can lack the long-term growth drivers of capital cities. On the other hand, city investments are typically more resilient in fluctuating markets but require more financial commitment upfront.

That’s why the key to successful property investing lies in research. Without accurate and up-to-date data, it’s difficult to pinpoint which suburbs are likely to outperform over the long term.

Surprisingly, there are suburbs located within or just outside metropolitan zones that offer strong rental yields, good affordability, and solid capital growth potential—all while being more attainable for first-time or budget-conscious investors.

Where Are the Best Places to Invest?

Property investors frequently ask:

• Where is the best suburb to buy investment property?
• Which suburbs offer property under $500,000?
• What are the best-performing metropolitan areas for rental yield and growth?

Finding the answers to these questions used to take hours of research.

Now, it takes seconds.

With SuburbsFinder, you can instantly discover the best-performing suburbs across Australia’s major cities based on the investment criteria that matter most.

Filter by:

• Median property price (with an option to target suburbs under $500k)
• Annual capital growth of 5% or more
• Gross rental yields above 5%
• Vacancy rates below 3%
• Strong demographic indicators (e.g. income, population growth, rental demand)

🎥 Watch: How to Find High Yield Suburbs within Seconds

The Most Comprehensive Suburb Investment Report in Australia

SuburbsFinder gives you access to Australia’s most complete suburb-level investment report. Every suburb is linked with key metrics including:

• State and postcode
• Median house/unit prices
• Annual capital growth
• Rental yield
• Vacancy rates
• Population and household income
• Mortgage repayment data

Whether you’re a property investor, buyer’s agent, mortgage broker, or developer—this tool gives you everything you need to make smarter, faster, and data-driven property investment decisions.