New analysis from buyers agency InvestorKit has showcased some of the country's top performers based on their housing markets and local economic recovery.
Factors including the cities' Gross Regional Product (GRP), industry diversity, population, unemployment, migration, construction and property markets were analysed to produce the top 10 powerhouses in Australia.
This new report comes after residential property prices rise 23.7% in 2021 alone according the latest ABS data.
Founder and Head of Research at InvestorKit Arjun Paliwal said Australia performed extremely well compared to other countries which puts the country in a very strong position for economic growth.
"Our pick of 10 powerhouse cities out of the whole country were based a range of things to create a diverse list, not just the largest local economies," Mr Paliwal said.
"We considered large and strong economies, some of the best-recovering economies which were previously weak, and relatively strong markets in comparison to their size.
"As the performance of local economies is closely linked to the performance of housing markets and vice versa, it’s interesting to see the positive flow-on impact with lag and how this can help guide future investment decisions."
10 standout Australian regions based on economic performance
In no particular order, the top 10 cities based on InvestorKit's research are: Greater Adelaide, Greater Hobart, Western Sydney, Townsville, Toowoomba, Bendigo, Shepparton, Geelong, Orange and Wagga Wagga.
Greater Adelaide, SA
The Adelaide economy has been growing since 2017 with the unemployment rate declining to 5.5% as of February.
Adelaide's GRP is gaining momentum, infrastructure is increasing, and the housing market remains affordable with a median house price of $555,000.
"The strong momentum on Adelaide’s Gross Regional Product is due to the Government’s heavy investment in infrastructure, the region’s balanced industry structure which supports sustainable economic growth, and the steep drop in unemployment rate - which demonstrates a resilient economy," Mr Paliwal said.
"Further, Adelaide’s visitor numbers have risen over the last two decades. It won’t be long until we see Adelaide become one of Australia’s leading cities for innovation, lifestyle and tourism."
Greater Hobart, TAS
Tasmania has been one of Australia's top-performing regional hotspots with a median house price of $640,000 and extremely low vacancy rates.
The unemployment rate is continuing to decline, currently sitting at 4.4%, and the list of infrastructure projects in progress currently sits at $12.5 billion.
According to Mr Paliwal, Hobart has experienced "one of the strongest local housing booms and indicates a flourishing local economy for years to come."
Western Sydney, NSW
Penrith, Blacktown, Camden, Liverpool, Fairfield, Cumberland, Parramatta and The Hills Shire have been included as part of Western Sydney.
According to Mr Paliwal, Western Sydney could be one of Australia's most powerful economies, with $108 billion of construction projects currently underway and a population of nearly two million.
With its new airport in progress, it has one of the highest-performing new build markets in Australia.
However, there is an affordability crisis - with the median house price currently at $990,000 - and a high vacancy rate.
"We see shifts of demographics occurring and further high-income jobs to hit the area to create a shift in affordability longer term," Mr Paliwal said.
Townsville, QLD
The unemployment rate was double-digits in 2016 but now sits at a low rate of around 5%.
There is currently $12 billion in construction projects and $18 billion in surrounding areas.
"Townsville’s pipeline infrastructure paired with being one of Australia's most affordable property markets with a $370,000 median property price and having a tight rental market puts the region in a strong position for buyers," Mr Paliwal said.
"In the decade ahead, it will become a city of opportunities and prosperity as it exits its state of recovery."
Toowoomba, QLD
After a brief drop between 2018 and 2020, Toowoomba's GRP is currently $11.63 billion.
The regions sustainable economic growth is supported by industry diversity, the declining unemployment rate (3.9%) and growing job ads reaching a 10-year high last year.
Household affordability is also strong with a median house price of $445,000, which "indicates good signs of rising market pressure" according to Mr Paliwal.
Bendigo, VIC
Bendigo is experiencing an economic boom with a $6.11 billion GRP, job ads and housing market significantly increasing.
The unemployment rate is sitting at a low 4.4% with a population of nearly 120,000.
"Unlike the other regions in this list, Bendigo’s largest projects have already come together and are now buzzing along," Mr Paliwal said.
"In recent years, the North Bendigo Hospital build and expansion was a key project for the region worth more than $600m, and now, we are seeing other notable projects like improvements to the airport and the GovHub and Law Courts in the pipeline.
"This has contributed to the rising median house price of $510,575 over the past two years."
Shepparton, VIC
According to InvestorKit, Shepparton is responsible for 25% of Victoria's rural output.
It is home to 10% of Victoria's population, has a diverse pipeline of infrastructure, and has seen strong capital growth off the back of the housing boom with a median house price of $387,500.
Geelong, VIC
According to Mr Paliwal Geelong has Victoria's most active economy, with jobs, GRP, and infrastructure all experiencing growth.
"Geelong has close to $100 billion in activity that has a direct or indirect benefit to the city. Its top five job markets are also closely aligned with national numbers, diversity wise," he said.
"These factors have led to Geelong’s strong performance, but given the maturity phase of its housing market, it may mean the local property market has already seen some of its best years of capital growth as their booms started well before the pandemic.
"We do however see its strong housing conditions returning in the years ahead as all this economic positivity flows through."
Orange, NSW
According to InvestorKit, Orange is home to one of the country's best-performing housing markets over the past few years due to its local economy and unemployment rate of 2.5%.
Orange is a diverse city which attracts tourists and residents, providing great confidence to locals for jobs and wealth creation.
Wagga Wagga, NSW
An attractive region for investors, Wagga Wagga has a tight rental market with 4 to 5% growth and high yields each year.
It also has a 2.5% unemployment rate - one of the lowest in the country - and has a strong infrastructure pipeline of $5.1 billion.
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