All three cities have their unique advantages for investment. But over the last few months, Melbourne has quietly become popular among property buyers in Australia. The reasons include infrastructure developments, higher rental yields, and good returns.
In 2026, the Australian property market has seen a hike in demand for new homes in Melbourne, Perth, and Sydney. All three cities have delivered exceptional long-term returns. They equally attract new home buyers and commercial investors.
But, out of three, one city is more in demand than the others. In this article, we will help you understand where you should invest in Australia in 2026.
Sydney
- Median house price (2026): ~$1.3M–$1.76M
- Rental yield: ~2.5%–3.5%
- Infrastructure Projects: Western Sydney Airport, Sydney Metro expansion, transport upgrades
As always, Sydney is a top choice for investors in Australia, and it is expected to continue rising in 2026. It is assumed that there will be around 6% increase in houses by the end of the year.
Ofcourse, due to inflation, interest rates can be high in Sydney and the housing supply will remain tight. Home prices in Sydney will continue to rise in 2026 and beyond. Areas like Haberfield and Dulwich Hill are among the top picks for investors due to increased connectivity from the light rail.
Melbourne
- Median house price: ~$972K–$1.05M
- Rental yield: ~3%–4.5%
- Infrastructure Projects: Suburban Rail Loop, Metro Tunnel, major suburban developments
From 2025 onwards, investors are choosing Melbourne. The reason is a strong growth in infrastructure, housing, and other amenities. Rental demand is also increasing across many suburbs, especially near universities and transport hubs. Large-scale infrastructure projects are expected to drive long-term property value growth across the city.
Perth
- Median House Price (2026): ~$890K–$1.02M
- Rental Yield: ~4.5%–6%
- Infrastructure Projects: Housing expansion, transport upgrades, mining-related developments
Many investors believe that Perth can be flooded with too many investors, and it may not be the right place to invest. But, some found it a great city for a higher return in future. The reason behind it is low housing supply and increasing demand.
Also, Perth offers some of the highest rental yields in the country, making it attractive for investors in Australia.
Comparing Sydney Vs Melbourne Vs Perth 2026
| Factor | Sydney | Melbourne | Perth |
| Median House Price | ~$1.3M–$1.7M | ~$972K–$1.05M | ~$890K–$1.02M |
| Median Unit Price | ~$820K–$1.1M | ~$560K–$720K | ~$520K–$650K |
| Rental Yield | ~2.5%–3.5% | ~3%–4.5% | ~4.5%–6% |
| Expected Capital Growth | ~5%–6% | ~6%–7% | ~12%–13% |
| Affordability | Lowest affordability | Moderate affordability | Affordable among major cities |
| Population Growth | Strong international migration | Rapid long-term growth | High growth rate nationally |
| Vacancy Rates | Low | Low to moderate | Extremely low |
| Investor Demand | Strong long-term demand | High demand | High demand |
| Infrastructure Projects | Sydney Metro, Western Sydney Airport | Suburban Rail Loop, Metro Tunnel, Schools/universities | Transport upgrades, housing expansion |
| Best For | Blue-chip long-term investment | Balanced growth and affordability | High yields and rapid growth |
Do you need help in deciding where to invest – Melbourne, Sydney, or Perth? If yes, then Property Buyers Australia can help you. We have team of experienced property experts who can guide eyou to invest in the best property in Australia as per your needs and budget. Give us a call today!
