Country cousins can add value to property portfolio

Media release - 13th August, 2013

A regional property investment should not be overlooked, says Raine & Horne

Residential property’s return to form since May 2012, with capital city values up almost 7 per cent, is capturing the attention of many, but Angus Raine, CEO of Raine & Horne, urges investors with an appetite for growth to keep a regional property asset in mind.

“While low interest rates, a volatile share market, healthy yields and low vacancy levels are making capital city investment properties an excellent long-term growth proposition, investors shouldn’t overlook a regional property investment as well,” says Mr Raine.

Mr Raine is advocating the value of owning an investment property in regional cities with long-term capital growth potential, such as Tamworth and Wagga Wagga in NSW, Toowoomba in Queensland, Bunbury in WA and Port Augusta in SA.

Bryan Bolitho, Principal at Raine & Horne Tamworth, says, “In Tamworth it’s possible to buy an older-style, three bedroom home, with a single bathroom and garage for around $250,000, so your money can go much further in a regional town like ours.

“Enquiries from investors have been constant, with many looking to purchase around the $200,000 to $300,000 mark, which will deliver a yield of around 5.5 per cent in the Tamworth area,” he said.

“There is no doubt that grabbing a property in a regional city like Tamworth can also be particularly profitable for investors and relatively secure given our vacancy rates are below 2 per cent”.

Long term, Mr Bolitho expects property values to continue to flourish, given the region’s growing population, which is above the benchmark for regional NSW.

“Population growth of more than 1 per cent annually combined with a number of major infrastructure developments, such as the refurbishment of Tamworth Hospital, will put added pressure on the supply of rental accommodation, and it is likely that rental prices will continue to grow strongly over the next few years.”

A flat mining sector has hurt some regional centres, but large inland cities such as Toowoomba, which is 90 minutes from Brisbane, have sufficient economic diversity to weather a downturn.

“Toowoomba is the commercial and economic hub of the Darling Downs, and the service centre for the Surat Basin’s thriving agriculture, manufacturing and energy industries, such as natural gas,” says John Drysdale, Principal of Raine & Horne Toowoomba.

In Toowoomba, which has a current population of 250,000 people, a decent three bedroom home on a generous block can be secured for around $300,000 and generate weekly rents of around $320, according to Mr Drysdale.  

“We expect that rental returns will jump as the billions of dollars in expected investment flows into the region, adding even more workers to the booming local population,” says Mr Drysdale.

Nevertheless, Mr Raine warns that buying an investment property in regional Australia isn't a licence to print money, however investors who do their research can be rewarded by solid returns in the right regional centres.

“Look for towns that have viable, growing economies, while predicted rises in population and employment are key, as these bode well for long-term real estate growth,” says Mr Raine.

“A diversified economy is also important, as a region that supports a variety of industries is better placed to withstand a downturn in one sector.

“Features that attract renters such as access to public transport, major roads, hospitals, schools, universities and jobs in our major cities are also a plus when looking for a rental property in regional towns.

“Investment inevitably carries risk, so let the experts at Raine & Horne help you get started on researching the market in regional towns,” says Mr Raine.

To find out more about a regional property investment, contact your local Raine & Horne agent or visit rh.com.au.

Breakout: Angus Raine’s tips for buying an investment property in a regional town

  • Research is critical to a successful regional real estate play, which generates decent capital growth and yield.
  • Look for regional towns with viable and growing economies and populations – the Australian Bureau of Statistics or the local council are great sources of data about the demographics of a town.
  • A regional town with excellent long-term growth prospects should have decent infrastructure in place – public transport, major roads, hospitals and schools.

-ENDS-

For further media information contact:

Angus Raine, CEO, Raine & Horne on 0409 920 697

Andrew Harrington, National Marketing & Communications Coordinator on 02 9258 5400