As Australia’s capital cities become more and more unaffordable, a number of regional cities are becoming very attractive places to live and work. With healthy local economies – due in part to renewed investment in infrastructure, mining and commercial development – some regional cities are able to offer all the advantages of the capital cities but with the added benefits of cheaper housing and a thriving property market.
Residential property has always been more affordable outside of main cities. And these days, so-called second-tier cities have quality local transport, thriving café scenes, excellent retail facilities and abundant employment opportunities with wages that compare favourably with those in metropolitan centres.
Some residents of regional cities are even able to enjoy the best of both worlds – commuting to their big city jobs from small-town homes via improved transport links. In addition, the National Broadband Network is delivering faster broadband across the country making it much easier to create regional start-ups in non-metropolitan centres. Working remotely has also become much easier.
All of this is good news for owner-occupiers, property investors and private lenders. It means property investment is a very good bet in certain regional areas, particularly those on Australia’s eastern seaboard.
So where are these regional hotspots?
In Queensland, Mackay is of particular interest. There has been a notable focus on investing in the tourism sector and improving transport infrastructure and other resources to provide support to non-mining activities such as agriculture and services.
The injection of capital in Mackay’s economy is accompanied by favourable housing market figures – a median house price that corresponds with the average Queensland loan, house rental yields of 5.2 per cent and vacancy rates of just 1.9 per cent.
Other Queensland hotspots include Central Highlands and Douglas Shire which are experiencing similar economic revitalisation.
Ballarat, 100 km west of Melbourne, is home to the $462 million redevelopment of the Ballarat Base Hospital. While house prices declined in Melbourne by about 7 per cent in 2018, Ballarat saw an 8 per cent increase in the same period, according to CoreLogic.
Other Victorian hotspots poised for housing price increases include Wodonga, Mitchell and Warrnambool.
New South Wales
In Australia’s most populous state, the Maitland council area, just west of Newcastle and less than 130 km north of Sydney, has healthy median house prices coupled with vacancy rates of a mere 0.8 per cent. A brand new $460 million, 7-storey hospital is one of a number of development projects in the area that will have a combined value of $718 million.
Dubbo, Port Macquarie-Hastings and Yass Valley are other NSW regional areas with low residential property prices and good prospects for appreciation, thanks to public and private investment projects that will boost local resources.
While not all regional areas provide smart investment opportunities, some certainly have all the trappings of investment success. The important thing is to zone in on one of the buzzing regional centres, do some research and then make a well-calculated investment. Private lenders and non-bank lenders are especially mindful of the bright prospects of investing in the residential housing market in upcoming regional hotspots.