Investor activity across New South Wales is on the rise, with new data highlighting the suburbs delivering the strongest returns for both houses and units.
According to the latest PropTrack Westpac Investor Report 2026, investors now account for 44% of all home loans in NSW, a significant increase from 37% in late 2022 and 29% in 2020. This surge reflects growing confidence in the market, driven largely by tight rental supply and rapidly increasing rents.
Encouragingly, the report also found that 90% of investor sales in Sydney and 97% in regional NSW were profitable in the final months of 2025.
What’s Driving Investor Demand?
The key factor behind this strong investor activity is clear:
rental market pressure.
With vacancy rates remaining low and rental prices climbing sharply, investors are seeing greater opportunities for consistent returns.
REA Group Senior Economist Angus Moore noted that while investor participation is high, it is not unprecedented. However, current conditions — particularly limited rental availability — are creating a strong incentive for investors to re-enter the market.
Affordable suburbs are also playing a major role, with areas in Sydney’s outer south west and south west attracting increased attention due to stronger recent price growth and accessibility.
Top 10 Investor Suburbs in NSW (Units)
Sydney continues to dominate the unit market, particularly in more affordable pockets with strong rental demand.
Leading the list is Moorebank, followed by Chipping Norton and Kingsgrove.
Key insights from the top-performing unit suburbs:
- Moorebank recorded a median price of $925,000 with an impressive 29.4% annual growth and a 5.2% rental yield
- Chipping Norton delivered 24.6% growth and a 5.3% yield
- Kingsgrove achieved 18.8% growth with a 4.8% yield
Other standout suburbs include:
- Mascot – strong 6.2% rental yield
- Lakemba – affordable entry point with 5.4% yield
- Ultimo – highest yield on the list at 6.4%
These suburbs benefit from short rental days on market (as low as 14–27 days), highlighting strong tenant demand.
Top 10 Investor Suburbs in NSW (Houses)
For houses, regional NSW and Sydney’s outer growth corridors are leading the charge.
Top performers include Tumbi Umbi, North Richmond, and Austral.
Key highlights:
- Tumbi Umbi: 21.5% annual growth with a median price of $1.158M
- North Richmond: standout 31.6% growth, one of the highest in the state
- Austral: strong 22.8% growth in Sydney’s expanding south west
Other notable suburbs include:
- Airds and Mount Annan – solid growth and steady yields
- Bonnyrigg and Wattle Grove – popular with investors seeking long-term growth
While rental yields for houses (around 3.1%–3.8%) are lower than units, these areas are delivering strong capital growth, making them attractive for long-term investors.
Emerging Investor Hotspots in Sydney
Beyond the top 10 lists, several Sydney regions are seeing growing investor interest.
Suburbs like St Marys, Fairfield, Mount Druitt, and Blacktown are attracting significantly higher investor inquiries compared to the city average.
These areas appeal due to:
- Relative affordability
- Strong rental demand
- Ongoing infrastructure and growth potential
What This Means for Investors in 2026
The current market presents a clear trend:
Investors are targeting affordability, rental demand, and growth potential.
While rising interest rates may create some headwinds, the ongoing rental shortage is expected to continue driving investor activity throughout 2026.
For property investors, this means:
- Units offer strong rental yields and quicker returns
- Houses provide long-term capital growth opportunities
- Outer and affordable suburbs remain key areas to watch
Final Thoughts
NSW’s property market continues to present compelling opportunities for investors, particularly in high-demand rental areas and emerging growth corridors.
With strong price growth, tight rental conditions, and high profitability rates, 2026 is shaping up to be another active year for property investment across Sydney and regional NSW.
