Sometimes you have to look beyond the bright city lights for opportunity, and this holds true for property investment.
This is why savvy investors are looking to regional areas in Australia, where some of the fastest growing areas for property investment are. CoreLogic’s Cameron Kusher observes that all their data points to growth for regional markets, especially those within striking distance of capital cities, with affordability the main driver.
That is not to say regional markets are not without risk. You only have to look at some of WA’s mining towns, where the boom was relatively short lived, and the crash has hurt many who bought when the market was booming.
So, where to invest in 2018? And where are the best places to invest and top growth suburbs in regional Australia? Let’s take a look at some to watch in 2018 and beyond.
NSW fastest growing regional property
If you are looking for the best regional investment areas and opportunities away from Sydney’s crazy market, there are plenty of regional centres which posted excellent growth in 2017.
Corelogic reported that the Illawarra region is Australia’s top regional performer for the September 2017 quarter, with houses and apartments up by 13 per cent and 17 per cent respectively.
Based on growth of the median property price (year on year performance to September 2017), Wollongong had a stellar year posting 13.9 per cent growth, with a median house price of $740,000. The local economy is self-sufficient, with education and tourism as the primary drivers, and with 1,100 people moving into the region every week, the Gong is on the rise. And being just 90 km from Sydney, it is commutable by car and train.
Other regional property hotspots just south of Wollongong - include Shoalhaven (+19.5 per cent growth/median price: $545,000) and Shellharbour (16.7 per cent growth/median price: $650,000). Parts of the South Coast have also performed strongly over 2016/2017, with Falls Creek, near Jervis Bay (+55.4 per cent); and Denhams Beach (+48.78 per cent) near Batemans Bay both standout performers.
Investors are also looking north to the once unfashionable Newcastle, which has been transformed into one of fastest growing regional towns in the state. BIS Shrapnel’s Australian Housing Outlook reports that the 7 year price trend for houses here has been a solid 6.9 per cent per annum, while units have outperformed them posting annual returns of 7.7 per cent.
The best suburbs in Newcastle, and those likely to experience growth in the near future include Wickham, Lambton and Lake Macquarie, which is a short 30 minute drive from the CBD.
Investors are looking to once unfashionable Newcastle, which has been transformed into one of fastest growing regional towns in NSW
Victoria regional property hotspots
Melbourne is the undoubted centre of Victoria’s property market, and while it is still more affordable than Sydney, investors are increasingly looking to regional areas in Victoria for better value and more attractive growth opportunities.
Many of Victoria’s regional hubs and towns are now more accessible to Melbourne, thanks to better transport links, and they offer a more relaxed lifestyle. Here the best investment suburbs for 2018 include Lorne, where the median house price grew by 35.26 per cent over 2017, the Greater Geelong (+13.1%) area - just 75 km from Melbourne and Wodonga (+6.7%).
Many of Victoria’s regional hubs and towns are now more accessible to Melbourne, thanks to better transport links and offer a more relaxed lifestyle
Queensland regional property hotspots
Queensland’s regional markets took a serious battering when the mining boom came to an end, but there are signs of recovery.
Employment is rising and vacancy rates are tightening in many, including in Townsville. The same applies to Cairns where a strengthening tourism sector is being supported by local migration. Other growth hotspots are Sunshine Coast suburbs, including Buddina (100 km from Brisbane), Forest Glen, and Noosa Heads - which all grew by 13 per cent or more in the year to October 2017.
South Australia regional property hotspots
The Domain House Price Report reveals that Adelaide’s current median house price is $519,517, which is affordable by capital city standards.
But if you are looking for something more affordable, say with a median house price under $300k, then South Australia’s coastal towns are worth investigating. These include Tumby Bay ($227,500), 50 km from Port Lincoln, Stansbury ($243,000) and Kingston ($246,000).
Otherwise Mount Barker, 35 km east of Adelaide, currently offers great value for money and proximity to the city as well as access to any number of outstanding local wineries. Blanchetown, 109 km from Adelaide, which CoreLogic reports grew 42.6 per cent over 2016/2017 is another regional location to watch, growth that puts it in the top 10 fastest growing suburbs. .
If you are looking for an affordable investment under $300k, then South Australia’s coastal towns are worth investigating
Western Australia regional property hotspots
Like Perth, regional Western Australia has seen hard times since the mining boom disappeared over the horizon, where dwelling values have fallen faster than the state capital.
The flipside of this is that WA is now one of the most affordable property markets in the country - which never lasts very long. If you are looking for somewhere close to Perth then Scarborough - just 14 km from the CBD - offers beachside living without the price tag of many other high profile suburbs. Property prices here grew 2.82 per cent in the year to June 2017, where most city suburbs are still negative.
Further afield Fremantle (23 km from Perth) has had significant spending on its infrastructure, including the train station, Victoria Quay and waterfront. Other regional towns with recent upgrades to local infrastructure include Katanning (300 km from Perth), which is now connected to the NBN, with further funds earmarked for local hospitals and schools.
Also investigate Bluff Point (376 km from Perth) which CoreLogic records grew 42.6 per cent in 2016/2017, and had a median house price of $485,000.
Bluff Point, 376 km from Perth, grew 42.6 per cent in 2016/2017, and had a median house price of $485,000
Tasmania regional property hotspots
Once upon a time hotspot would not have been associated with property and Tasmania. How times have changed, with Hobart the leading state capital for price growth in 2017.
If you want to look beyond the bright lights of Hobart then the next obvious option is Tassie’s second ‘city’ Launceston. The REIT reports that sales there were up more than 20 per cent in 2017. Meanwhile the suburbs with the highest turnover for the year to September 2017 included regional Devonport (north coast), New Norfolk (35 km from Hobart) and Newnham just outside Launceston.
Identifying a regional property hotspot
Now you know where some of the best places to invest in property are, you also need to know what signs to look for. What magic ingredients make a regional town or suburb ripe for investment? The secret is to find an area with a whole range of positive factors, specifically:
- High population growth, which stimulates demand for property and drives prices up
- A robust, thriving and diverse local economy that is not reliant on one sector or employer
- Anywhere with major infrastructure projects - such as new transport hub, hospital or factory - that will create jobs and boost the local economy
- Suburbs where the rental yield is rising, as this indicates there is strong demand for rental accommodation in the area.
- Areas where the growth in median household income is higher than inflation. This demographic has money to spend and the area is very likely to gentrify.
- Low supply but plenty of demand from purchasers, capital growth will be strong
It is also about timing. Buy into a regional property hotspot at the right time and you could greatly increase your ROI in a much shorter time frame.