Ray White chief economist Nerida Conisbee says regional markets near capitals are usually shaped by the capital city cycle.
Living near a capital city used to almost guarantee property gains, but new data shows proximity alone no longer drives regional house price growth.
The Ray White research, captured over 10 years, compared median house price trends across selected regional markets near major capitals with the performance of the nearest capital city.
Aerial photo of city centre of Geelong in Victoria.
“The clearest pattern is that regional markets near capitals are still shaped by the capital city cycle,” said Ray White chief economist Nerida Consibee.
“When the nearest capital has been strong, nearby regional markets have generally benefited; when conditions have softened, that weakness has also flowed through.”
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Aerial of the Sunshine Coast in Queensland.
On average, regional markets near Sydney, Melbourne, Adelaide and Perth have outperformed their nearest capital city since 2016.
“The largest differences are around Melbourne and Perth,” Ms Conisbee said.
“Melbourne-linked regional markets rose by around 86 per cent, compared with 42 per cent for Melbourne, while Perth-linked regional markets rose by around 133 per cent, compared with 103 per cent for Perth.
“Brisbane and Adelaide show a different pattern, with nearby regional markets moving much more closely in line with the capital city.”
Mandurah, south of Perth, is supported by lifestyle and population growth drivers that extend beyond simple proximity to a capital city
Ms Conisbee said this meant the regional markets linked to Brisbane, Adelaide and Perth should hold up better while those capitals remained stronger.
“The Gold Coast, Sunshine Coast, Mandurah, Busselton and Margaret River are also supported by lifestyle and population growth drivers that extend beyond simple proximity to a capital city,” she said.
The Gold Coast market has benefited from strong population growth, interstate migration and lifestyle demand.
In Queensland, the Gold Coast and Sunshine Coast have benefited from the same forces supporting Brisbane — strong population growth, interstate migration and lifestyle demand – which has kept their growth broadly in line with an already very strong capital city.
In Western Australia, the pattern is more pronounced — Mandurah has combined relative affordability with access to Perth, while Busselton and Margaret River have benefited from the state’s broader economic strength as well as their lifestyle appeal.
“As a result, Perth-linked regional markets have pulled further ahead of their capital than the Queensland markets have,” Ms Conisbee said.
Geelong has outperformed Melbourne over the longer term.
She said Melbourne-linked regional markets told a different story.
“Geelong, Mornington Peninsula and Surf Coast have all outperformed Melbourne over the longer term, but the scale of growth has been far weaker than in Queensland, Western Australia or Adelaide-linked markets,” she said.
“This suggests proximity to a capital city helps, but it is not enough on its own.
“The strength of the underlying capital city still matters.”
Ray White chief economist Nerida Conisbee says larger more established regional city markets appear to be holding up better than some of the more discretionary lifestyle markets.
She said Sydney’s nearby regional markets sit somewhere in the middle.
“The Central Coast and Wollongong have both performed strongly and are now at new highs,” she said.
“The Southern Highlands has also delivered strong long-term growth, but has softened more noticeably from its peak.
“This points to differences even within the same capital city catchment.
“Larger, more established regional city markets appear to be holding up better than some of the more discretionary lifestyle markets.”
Aerial view of Wollongong.
Ms Conisbee said the outlook now depended heavily on the nearest capital city cycle.
“Sydney and Melbourne are slowing more quickly than Brisbane, Adelaide and Perth, and that is likely to have the greatest impact on their nearby regional markets.
“Areas such as the Central Coast, Wollongong, Geelong, Mornington Peninsula and Surf Coast remain exposed to buyer confidence and affordability conditions in their nearest capital.
“If Sydney and Melbourne soften further, these regional markets are likely to feel it.”
The Ray White analysis covered data from June, 2016 to March, 2026.