I think you're totally ignoring cash flow investors who tend to invest in the 'first home buyer suburbs'. Look at how popular threads on Adelaide are on here- particularly in the southern (Christie Downs, Christie Beach, Hackham) and northern suburbs (Elizabeth). We see it as well with Melbourne people looking for cheap western suburbs places and who can forget Brisbane with investors snapping up Logan and the prize of them all- Mount Druitt in Sydney. Most of the people who invest in these suburbs intentionally buy houses below the median price of the suburb (it helps with valuation down the track) and do small renovations so they can value add. I know because that's exactly what I'm doing- competing against first home buyers in the outer suburbs. Your point might have a merit with foreign investors who are limited to buying apartments and OTP (but the rules aren't strictly enforced so they can purchase anywhere).