Investors are shifting toward regional Australian property markets as a capital-gains tax reform working its way toward implementation reshapes the calculus for holding investment property, according to Mortgage Professional Australia (mpamag.com). The reform replaces the existing capital gains tax discount with cost-base indexation for assets held longer than 12 months. It passed into law in June 2026, with properties bought before 12 May 2026 grandfathered under the old rules, and the new regime takes effect on 1 July 2027.
Ray White Group head of research Vanessa Rader was cited framing the shift: investors are turning to regional markets partly because established housing is often the only option in areas where new supply is not being built. Regional pockets of Queensland, New South Wales, Western Australia and South Australia show median house prices mostly under $300,000 alongside yields of 15% to 20% or higher. The standout examples cited include Aramac, Queensland, where a $120,000 median price produces a 33.9% yield, and Mount Magnet, Western Australia, where a $49,000 median produces a 31.3% yield; mining towns Andamooka and Coober Pedy in South Australia were also cited among the highest-yielding markets. The report attributes the elevated yields in these areas to tightly held rental stock tied to mining, pastoral or government activity, rather than to population growth.
Separately, PIPA’s 2026 Annual Investor Sentiment Survey found that 18.3% of property investors sold at least one property in the year to August 2026 — a record high in the survey’s history — with more than half of those sales going to owner-occupiers or first-home buyers rather than other investors. Modelling on a proposed ban on residential property holdings inside self-managed super funds (SMSFs) was cited as likely to strip around 2,000 dwellings from the supply pipeline by 2029/30.
For anyone holding, or considering holding, Australian investment property, the combination of the 2027 cost-base change and the current wave of investor sell-downs points to a market where regional, higher-yield assets are increasingly positioned as an alternative to capital-city holdings under the new tax treatment.
References
Mortgage Professional Australia – Regional yields shine as new tax rules bite from 2027
