Leading property group Raine & Horne is predicting that booming regional property markets will enjoy capital growth as high as 10% in 2021.
“The property planets have aligned for regional cities such Bathurst in NSW, Queensland’s Toowoomba and Mandurah, around an hour south of Perth,” said Angus Raine, Executive Chairman, Raine & Horne.
“Interest rates are at all-time lows, and more city slickers have identified they don’t have to work 9-5 in a CBD anymore,” Mr Raine said.
“In nine months, COVID-19 has done more to speed up decentralisation than a hundred years of government policy and planning.”
Mr Raine continued, “More homeowners realise they can get great bang for buck by shifting to a regional city but still have access to excellent educational and medical services, employment and the lifestyle benefits they’ve come to expect in the big cities.
“For those working from home in regional cities, the rollout of the NBN couldn’t have arrived at a better time.”
Bathurst property to motor along by 5% in 2021
Supercars won’t be all that’s motoring in Bathurst in 2021 with local real estate values expected to accelerate by 5%, according to Michelle Mackay, Co-Principal Raine & Horne Bathurst.
“We had 41 properties exchange over a 4-week period in late November and early December, which is a record for our office,” Ms Mackay said. “Moreover in 2020 we sold 14 properties worth above $1 million whereas we’d typically only sell three homes for seven figure results.
“There are lots of Sydney first and second home buyers moving here who will continue to work for city-based firms as well as some investors who recognise the appeal of Bathurst affordability and rental yields.
“Workers are selling up in Sydney and buying modern four-bedroom houses with double lockup garages on 900 square metres in Bathurst for $600,000.
“There are multiple buyers for every property and as a result values in Bathurst rose 5-6% in 2020.”
An older style townhouse at 6/38 Stanley Street, Bathurst sold within days of hitting the market for the asking price $369,000 after a bidding war between buyers.
“This has been an investment property for 14 years and is the first time it has been available for sale and was snapped up by an owner occupier.”
“It really helps that we’re within three hours of Sydney and have excellent roads between the capital and Bathurst as well as nearby Orange and Mudgee that are experiencing the same market conditions.”
Ms Mackay said the only possible caveat to growth of 5% for Bathurst in 2021 will be a lack of stock. “If you’re considering a sale then 2021 should produce some excellent results for vendors.”
Toowoomba no longer Queensland’s best kept real estate secret
The recovery from COVID-19 along with record low-interest rates has Toowoomba, 90 minutes west of Brisbane, set for one of its best real estate markets since 1993 when former PM Paul Keating was ensconced in the Lodge.
“Everyone wants to move to Toowoomba because you have real estate affordability, a full suite of services, jobs and great schools,” said Andrew Lynch, Principal, Raine & Horne Toowoomba.
“Thanks to COVID-19 putting Toowoomba up in lights, I can see no reason why we can’t achieve average growth of 10% in 2021.
“Families can get bang for their buck on a home, which then gives them more money to spend on education at one of this town’s many excellent schools such as Toowoomba Grammar that produced Australian Wallaby Jason Little and broadcaster Alan Jones, Glennie Anglican Girls School, Fairholme College for Girls, Downlands College where rugby union great Tim Horan went to school and many more.”
Toowoomba is also a specialist medical hub not only for the Darling Downs region of southern Queensland but also for Northern NSW. “The hospitals in Toowoomba are incredible, and we can get all the services offered in Sydney and Brisbane, and the local specialist services are also more affordable.”
Investors are starting return to Toowoomba because they have identified this is a multi-dimensional economy that has jobs growth across many sectors.
“Also, the inland rail link between Melbourne and Brisbane that will run through Toowoomba is expected to bring many thousands of extra workers and boost gross regional product, which is all good news for real estate values long-term,” said Mr Lynch.
“It helps that investors can achieve yields as high as 6% on the western side of Toowoomba and we have just 0.5% vacancy rates. Meanwhile, weekly rents are also going up.”
COVID-19 has been good to Mandurah
Despite earlier predictions of doom and gloom for real estate, the Western Australian regional city of Mandurah enjoyed a strong finish to 2020.
“With many retirees and mining sector employees preferring regional Mandurah to urban Perth due to the exceptional value on offer, we were able to flush out plenty of sales stock, and consequently our turnover increased by 40% compared to this time last year,” said Peter Vetten, Principal of Raine & Horne Mandurah.
“Many baby boomers are selling up in Perth for $700,000- $800,000 and are looking to buy a nice four-bedroom, two-bathroom house for between $450,000 and $470,000 such as 6 Wialki Mews, Dawesville.
Meanwhile, the former mining FIFOs are buying in Mandurah because they can buy larger blocks that they can build large sheds on to store their equipment and their toys.
As the market had to soak up so much stock in 2020, median property prices didn’t change much, Mr Vetten explains. “However, with listings now in short supply, price growth of around 5% in 2021 is possible.”
COVID also affected Mandurah’s rental markets, which is also impacting sales listings. Mr Vetten explained, “Because of border closures, mining companies now prefer their employees to live in Western Australia rather than fly in and fly out as many did throughout the last resources boom between 2003 and 2013.
“With the demand from the mining industry workers for rentals, we are now in a situation where we have record low vacancies, which is discouraging long-term investors from selling. This lack of turnover is contributing to a shortage of listings and ultimately we feel it will result in price growth.”
“In a market where there are more buyers than sellers, those vendors in Mandurah who make a move to sell should enjoy excellent results in 2021.”