Does Google prioritise local domains?

[Lazeh]

I'm in Australia targeting Australian traffic. I often see US domains in the Google SERPS and wonder if that indicates an opportunity for local (Australian) domains to rank?

[WebQuest]

That's highly dependent on the query itself. For example, for research-based searches, you'll see authoritative websites like Wikipedia dominate the search results as those kinds of searches are not relevant to any location. Think of a medical term, or a name of a movie,  or a type of flower for example.

However, for navigation-based searches, and local services based searches, you'll see very localized results. If you search for "plumber in CityName" - you'll see different results every time you use a different city name.

It comes down to the search intent as Google always aims to serve that intent to the best of its ability & understanding.