Smart money pushing regional values up by as much as 20 percent
Media release - 21st November, 2013
Buyers turning to regional hubs Dubbo, Nowra and Young for property investments
- The entry-level market in western NSW city Dubbo is up by more than 20 percent since June 2012
- Investor activity has helped boost Shoalhaven real estate values by 10 percent since the September Federal Election
- Yields of 6 to 8 percent are attracting smart Sydney money to Young in south western NSW
With growth of more than 12 percent over the last 12 months, Sydney is the undisputed heavyweight champion of Australian real estate, however Angus Raine, Executive Chairman and CEO of Raine & Horne, advises that NSW’s regional cities and towns are starting to box well above their weight class.
“Sydney’s real estate prices are surging, so shrewd buyers and investors are casting the net wider to regional population centres such as Dubbo, Nowra and Young, where it’s possible to secure affordable investments for less than $350,000, and where yields of 6 percent or more are achievable,” says Mr Raine.
“We are blessed with major inland regional cities with significant populations of 40,000 to 60,000 and with all the talk about Sydney’s surging median prices, I’d urge investors to look inland.”
For example, Raine & Horne Dubbo sold a three bedroom property at 457 Wheelers Lane, Dubbo, in June 2011 for $202,000, and then re-sold it in June 2013 for $246,000, without any major refurbishment. This represents an increase of nearly 22 percent.
“Another property at 9 Horizon Place, Dubbo sold to investors for $263,000, and is currently rented at $330 per week, showing a gross return of 6.5%,” says Mr Allan.
Mr Allan attributes the popularity of Dubbo to recent positive national press about the city, its integrated economy, affordable prices and generous investment yields.
“Dubbo is popular with investors as the residential property market is underpinned by a diverse economy dominated by agriculture, an emerging mining sector, and robust support industries such as education, trades, housing, community and recreational services,” said Mr Allan.
“Dubbo also has a strong retail sector servicing western New South Wales, which equates to a shopping population of 130,000 people, including those living in the town.”
“The entry-level market in Nowra is being fuelled mostly by yield-hungry investors from Sydney, although local buyers are making their presence felt,” says Mr Cochrane.
For example, Raine & Horne Nowra sold a two bedroom home at 15 Huxley Street, Nowra, to a local investor for above the asking price.
“It went to auction and sold for $263,000 with the local buyer beating out a number of other investors for the property,” says Mr Cochrane, who notes most properties in the area are generating a healthy net yield between 5.5 and 6 percent.
“Given the shortage of stock in this price range, we expect the values of homes priced below $350,000 to achieve growth of 5 percent by April 2014.”
Another regional town with a diverse economy set to shine is Young, located in the south west of the state, which at last count has a population of 12,500.[i]
“With the spike in property prices in Sydney, more entry-level investors are shifting their attention to Young, where it’s possible to secure a property for under $150,000 and achieve generous yields of between 6 and 8 percent,” says Chris Slater, Principal, Raine & Horne Young.
For example, Raine & Horne Young is in the process of finalising the sale of a two bedroom weatherboard cottage at 47 Blackett Avenue, Young to a Sydney investor for $139,000. The property is leased for $190 a week.
Mr Slater added that lifestyle acreages (2 to 50 acres) start from $400,000 and that enquiry for these properties are consistently strong, with Sydney and coastal buyers leading the charge.
“Long-term real estate values in Young will be underpinned by an economy diversified across a number of strong rural and retail sectors that create plenty of jobs,” says Mr Slater.
“We have cherries, grapes, wheat, canola, sheep, beef and piggeries, as well as a big shopping precinct with brands such as Big W, Woolworths, IGA, Harvey Norman and Aldi, plus a robust strip precinct that doesn’t have many vacancies.”
The growing population centre is also well-served with the modern Young District Hospital, an exceptional retirement village and a number of GP services, as well as easy access to specialist health services and excellent sporting and recreational facilities.
“The abattoir was closed down a few years ago and is expected to reopen in 2014, and it’s anticipated it will employ up to 300 people when it’s fully functional, which will make a big difference to the town and push up real estate values, ” said Mr Slater.
For further media information contact:
Angus Raine, Executive Chairman and CEO OF Raine & Horne on 0409 920 697
Andrew Harrington, National Marketing & Communications Coordinator on 02 9258 5400