Commercial agents in regional Australia have experienced a spike in investor activity, as more buyers begin to seek assets supported by population inflows and diversified economies.
With commercial properties rising in popularity in recent months, investors have gone beyond the capital city limits to pursue genuine growth.
According to Knight Frank’s latest Australian Regional View, commercial property investment activity outside of the capitals rose to its third-highest level on record in 2025, with transaction volume reaching $6.2 billion.
The report found that regional commercial transactions accounted for 11 per cent of the national volume, with demand driven by population growth, economic diversification and infrastructure development.
Knight Frank senior economist Alistair Read said that several key regional markets had seen their prospects reshaped in recent years and were benefiting from increased investor confidence.
“Investors are increasingly recognising that many regional centres now possess economic scale, population growth and industry diversity required to support long-term commercial property performance.”
He said that more government spending and population decentralisation were bringing more residents away from the capitals and towards regional hubs.
“These markets are increasingly generating growth from their own underlying fundamentals rather than simply following the capital city cycle.”
The report found that the population growth seen in recent years was likely to continue, with the regions tipped to experience a 10 per cent jump in residents over the next decade.
Additionally, the report said that rising tourism expenditure would drive increased demand for retail, hotel, and service-based assets, and create opportunities in new asset types such as glasshouses.
Knight Frank head of franchises and investment sales Mark Rafferty said the depth and maturity of the regional property market had attracted more investors to hub cities across the country.
“Many regional centres now benefit from population growth, significant infrastructure pipelines and increasingly diversified economies that support long-term investment performance,” Rafferty said.
He said that the network had seen growing interest from both local and interstate investors chasing assets supported by strong fundamentals and attractive growth prospects.
Outside of the capital cities, retail was the most-traded asset, accounting for more than 40 per cent of transactions.
Rafferty said that well-located coastal centres such as the Gold Coast, Wollongong, Townsville and Newcastle are regions set to perform strongly, with several key demand factors aligning in their favour.
“The regions we expect to see rapid growth in the future include Geelong, the Sunshine Coast and the Fraser Coast. These cities combine lifestyle appeal, relative affordability and strong employment opportunities.”
Additionally, the report said the growth would not be limited to coastal markets, with inland regional hubs such as Tamworth and Wagga Wagga possessing the fundamentals required to support their long-term performance.
Looking ahead, Rafferty said the attractiveness of regional assets to investors was more than just a phase, with buyers identifying that the market is well positioned to support long-term results.
“The growth across regional Australia continues to outpace the historical average, and we expect this to continue given the strength of the fundamentals across the market.”
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