THE south Rockhampton suburb of Wandal is emerging as an attractive residential and investment hotspot to a diverse group of buyers.

House prices have increased by 14.5% over the past 12 months, with a median price now of $315,000.

Real estate principal Pat O'Driscoll said the suburb was appealing to younger couples and families due to the traditional Queenslander-style properties, larger blocks and accessibility to good schools, shopping centres and the CBD.

"Being above the barrage, there's good access to recreation and water sports without the same prices as properties in neighbouring suburb, The Range," he said.

"The affordability is there. There's bang for your buck."

Mr O'Driscoll said Rockhampton's southside had very little potential for expansion and the limited supply and growing demand made for good investment potential.

He said a rising investment market was being driven predominantly by locals looking for longevity and security of value.

"Our rental vacancy rate is down to just over 4%, which is a sign of a strengthening market and the first sign of confidence coming back," Mr O'Driscoll said.

"Good rental returns are what piques the interest of people from out of town."