The June Quarter CoreLogic regional update once again confirmed that New South Wales has the largest number of Australia’s strongest performing regional markets.
Leading the way is the Illawarra region situated to Sydney’s south, followed by Newcastle, to the north of the capital, along with nearby Lake Macquarie. The Illawarra region recorded the largest annual increase in home values, up 15.8% for houses and 14.4% for apartments.
In Queensland, the Gold Coast region recorded increased values for houses (7.5%) and apartments (5.9%). On the Sunshine Coast, houses climbed by 6% and apartments by 4%. In Victoria, values in Geelong and the La-trobe-Gippsland increased. In Geelong, house prices rose by 8.3% and by 5.6% for units. In La-trobe-Gippsland, house values (2.9%) were out performed by apartments (4.1%).
Apart from the excellent growth, the benefits of buying in regional centres is the relatively affordability. For example a property in a popular NSW regional town such as Bathurst, has a median house price of $343,750 and $295,000 for units. In comparison, the median house price in Sydney is over $1 million and its more than $780,000 for apartments.
Research is critical to regional success
Before buying into a regional centre doing some research is a must. To assist your research, be sure to check whether a regional centre has a robust economy, strong employment prospects and population growth. These factors in combination can help underpin decent long-term real estate growth and rental yields. They can also provide some cover against the effects of environmental influences such as flood and drought, which can impact some regional towns.
Take Wagga Wagga, the largest inland city in NSW. Wagga is a central hub of services to a catchment of over 185,000 people and has strong economic and population growth, coupled with consistently falling unemployment rates that are below the NSW and national averages.
Economic diversity is the key to the success of regional towns and Wagga Wagga has this commodity in spades, noted my colleague Grant Harris, Principal of Raine & Horne Wagga. Public administration and safety contribute 17.2% to Wagga’s gross productivity and a large number of jobs, just ahead of education and training (11.4%) and healthcare and social assistance (10.4%). Other sectors of note include construction, manufacturing, retail and financial services.
“A number of government departments such as Centrelink are also major employers, along with the Australian Army base at Kapooka, the RAAF base at Forest Hill and Charles Sturt University,” said Grant. I’d add Wagga Wagga Rural Referral Hospital, the Laminex Group, and the Australian Airline Pilot Academy, which is affiliated with Rex Airlines, as other major employers.
In my book, Wagga Wagga has economic diversity in spades, and the best place to find information about a regional city’s diversity is by visiting the appropriate local government website. Do some research, and you’ll be on your way to regional real estate investing success.