Regional towns accounted for nine of the top ten local markets in McGrath’s latest residential index, with Glenorchy in Tasmania taking out the number one spot.
The McGrath Local Residential Index Winter/26 – a composite measure tracking demand, supply, pricing, rental dynamics, yields, and liquidity across 191 east coast markets – found strong underlying momentum in the year ending Q1 2026, a period that preceded the announcement of triple cash rate hikes and property tax reform.
Glenorchy, just north of Hobart, recorded 22 per cent growth in sales over the year, with homes selling in an average of 23 days. Prices grew 15.2 per cent, weekly rents rose 9.9 per cent, and gross rental yield sat at 4.67 per cent.
Tasmania was the standout state, claiming five of the top ten positions. Launceston placed second, followed by Meander Valley (4th), George Town (5th), and Devonport (7th). All five Tasmanian markets produced double-digit growth in both sales activity and prices, averaged fewer than 33 days on market, and saw rental growth above 5 per cent.
Victoria’s Horsham (3rd) and Warrnambool (8th), Queensland’s Cairns (6th) and Burdekin (9th), and NSW’s Wagga Wagga (10th) completed the top ten.
Across the broader index, 80 per cent of markets (153 of 191) recorded rising annual sales, while 85 per cent (163 markets) saw days on market fall – a trend McGrath attributed to persistently low listing volumes. Prices were stronger in 81 per cent of markets (155).
The rental picture was particularly tight. Annual rental growth remained elevated in 93 per cent of markets (177), with vacancy rates recorded at 1.7 per cent across both cities and regional areas. However, gross rental yields rose in fewer than half the markets tracked (81 of 191, or 42 per cent), suggesting price growth is outpacing rental increases in many locations.
Capital cities still led on speed of sale, with half of the ten fastest-selling markets located in the outer suburbs of Sydney, Melbourne, and Brisbane – driven largely by first-home buyer demand for more affordable stock.
Michelle Ciesielski, National Head of Research at McGrath Estate Agents, said regional markets continued to outperform, with buyers increasingly targeting what she described as escape-to-nature lifestyles in more affordable areas.
“While capital growth has been widespread, the real story is the rental market, where elevated demand is driving strong rental growth across nearly all regions, even as yields remain more selective which highlights the ongoing supply-demand imbalance,” she said.
The index reported that the highest growth in annual sales transactions also took place outside capital cities, led by Wellington in Victoria, while Rockhampton in Queensland topped the list for annual price growth and Isaac achieved the highest gross rental yield.