In the landscape of real estate investment, regional Western Australia emerges as a beacon of high capital growth potential. Surprisingly, some of the most robust property performances in the nation are witnessed in these lesser-known corners, outpacing even the esteemed markets of Sydney and Melbourne.

According to CoreLogic, while Sydney achieved a median growth of 10.6% over the past year and Melbourne saw a modest 4% increase, regional hubs like Bunbury in southwest WA boasted a staggering 18.5% growth during the same period.

Perth, too, has not lagged behind, marking an impressive 18.3% growth over the past year. However, the median price in Perth now towers above that of regional locations, where comparable growth is observed at more accessible price points ranging from $300,000 to $400,000.

Diving deeper into the regional landscape of WA, we find pockets of remarkable growth and affordability. Manjimup, with a median price of $455,000, saw an impressive 11.6% growth, while the Wheatbelt region experienced a 11.5% surge with a median price of just $364,400. Even in the scenic Margaret River, gains of 11.4% were recorded, albeit with a higher median price of $775,000.

However, investing in regional properties requires a cautious approach, as not all markets are created equal. While some areas flourish, others may falter or stagnate. Here are key considerations for investors venturing into regional real estate:

1. Insurance Costs: Assess insurance expenses, particularly in areas prone to environmental risks such as cyclones.

2. Environmental Factors: Investigate environmental overlays to avoid flood or bushfire-prone zones.

3. Rental Demand: Scrutinize rental vacancy rates and consult local agents to gauge tenant demand.

4. Building Restrictions: Verify building regulations, especially for bush blocks, to ensure growth potential isn't hindered.

5. Accessibility and Amenities: Prioritize areas with access to airports, commercial hubs, and essential amenities for sustained growth.

Above all, exercise caution when considering new suburbs with abundant land supply, as oversupply can stifle growth and prolong rental vacancy periods.

Article Q&A:

Which are the strongest performing regional WA property markets?
Bunbury had 12-month capital growth of 18.5 per cent, while Manjimup, with a very affordable median price of $455,000, had 11.6 per cent growth, the Wheatbelt region has had 11.5 per cent growth with a median price of just $364,400, while Margaret River delivered 11.4 per cent growth.

Are there risks associated with buying regional property?
Real estate investors should follow a few guidelines before buying regional property, including checking insurance costs, natural disaster and fire risks, rental vacancy rates, land supply and social and health support amenities.