Three Australian property markets where population growth meets thin supply

Brisbane, Melbourne pockets and regional hubs: the FY27 property case

The latest case for where Australian residential property will outperform in the new financial year is not built around a single city. Writing in a new FY27 outlook, property investor Scott O'Neill, founder and chief executive of investment firm Rethink Group, argues that the strongest conditions are forming in three places: Brisbane, two specific pockets of Melbourne, and selected regional centres — all unified by one dynamic: population-driven demand meeting inadequate supply.

In Brisbane, the case rests on interstate migration still running above historical averages, Olympics-related infrastructure moving from announcement to delivery, and relative affordability compared with Sydney. In Melbourne, the argument is contrarian: post-war redbrick apartments in inner suburbs such as Prahran, Fitzroy and Richmond, plus freestanding houses under A$1 million in established middle-ring suburbs, are said to be trading at discounts the broader market narrative overlooks. In regional Australia, O'Neill points to Geelong, Ballarat, Toowoomba, Albury-Wodonga and the Hunter Valley as centres with genuine economic diversification and strong gross yields.

The common thread, he says, is that affordability pressure is concentrating competition at price points the widest pool of buyers and renters can actually access. That thesis is 'not complicated,' as the author concedes — the challenge is acting on it while media attention stays fixed on the big-ticket capital-city stories. It is worth noting that the outlook is an opinion piece with a promotional element: O'Neill sells property investment services through Rethink Group, and the article closes with his podcast and book. No price, yield or migration figures are supplied to substantiate the specific claims.

What the three markets share — and what the pitch leaves out

One dynamic, three expressions

The analytical core is the claim that assets at accessible price points, in places with structural demand, tend to outperform when borrowing capacity is constrained. That framing is directionally consistent with well-documented Australian conditions: housing undersupply relative to population growth in South East Queensland has been flagged for years, Victoria has been a comparatively expensive state for property owners, and regional markets have corrected since 2022. What the article does not do is quantify any of it — there are no migration figures, no rental yields, no comparable-sales data for the Melbourne pockets.

Brisbane: a consensus case with a delivery schedule

Brisbane's medium-term story is the least contrarian of the three. Interstate migration and Olympics infrastructure are widely watched drivers, which means the investor asking whether they are 'already priced in' has a fair question. The practical risk is execution, not direction: the thesis depends on infrastructure delivering on time and migration staying above historical averages.

Melbourne: quality stock versus the state narrative

The more original argument is the distinction between legacy apartment stock and recent high-rise supply. Established redbrick buildings in Prahran, Fitzroy and Richmond have scarcity, larger floor plates and build quality that newer towers often lack — so a Melbourne-wide discount narrative can mask genuinely cheap, limited stock. Similarly, sub-A$1 million houses in middle-ring suburbs benefit from a widening demand pool as buyers slide down the price ladder. The missing piece is evidence: the claimed discount needs to survive comparison with actual recent sales.

Regional Australia: normalisation, not reversal

The regional argument is that the 2022 correction has mostly played out, while the drivers that attracted people to these areas — lifestyle, affordability, work flexibility — have not reversed. Where true, the named centres with diversified employment bases, rather than tourism-dependent towns, are the more credible candidates for sustained yields. That is testable locally: vacancy rates and gross yields in each named centre would settle it quickly.

Weighing the source behind the thesis

Readers should account for the messenger. O'Neill runs a property investment group and sells content and books tied to property investing; his view of market conditions aligns with his commercial interest. It does not invalidate the thesis, but it is a reason to test it against independent data before treating it as a strategy.

Pressure-testing the FY27 property playbook

For property investors weighing the FY27 outlook, the useful next steps are verification exercises rather than new positions:

• Test Melbourne's 'discount' claim against recent comparable sales for redbrick apartments in Prahran, Fitzroy and Richmond; if the gap versus newer high-rise stock is real and narrowing, the scarcity argument has substance.
• Model sub-A$1 million middle-ring house purchases against current borrowing capacity — the thesis depends on the demand pool at that price point widening, which weaker credit conditions would reverse.
• Pull independent gross yield and vacancy figures for Geelong, Ballarat, Toowoomba, Albury-Wodonga and the Hunter Valley before accepting the 'strongest gross yields' claim; the article provides no numbers.
• Treat Brisbane as a delivery schedule question: track Queensland's Olympics infrastructure milestones and interstate migration data rather than the headline narrative.
• Factor in Victoria-specific policy risk: changes to stamp duty, land tax or rental rules would directly alter the Melbourne affordability math this thesis relies on.