5 regional markets defying the downturn in the real estate market

Arjun Paliwal, Founder and Head of Research at InvestorKit, has identified five Australian regional markets poised to continue the boom from the COVID pandemic and administer strong capital growth going forward.

“Many are suggesting that a national real estate downturn is looming across the country, but it’s important to remember that Australia is a market of many local markets,” he said.

“While our capital cities like Sydney and Melbourne will continue to decline due to their greater sensitivity to financial and monetary changes such as interest rate hikes, many regional Australian cities will continue to post strong performances through 2023. at least.”

With 104,100 Australians fleeing capital cities for regional markets in the quarter to March 2021, according to the latest census data, Mr Paliwal is adamant that strong regional growth will continue despite falling values ​​in all capital cities. .

“There are still many regional areas with strong growth potential, due to common factors including an insufficient supply of properties for sale and rent, booming local job markets, strong prospects for business development, ongoing infrastructure, an accessible and affordable lifestyle,” he added.

Mr. Paliwal’s five regional areas that will continue to thrive are:

Tamworth, New South Wales:

Strong capital gains of 53% over the past 10 years still puts Tamworth below Sydney, but Mr Paliwal believes it highlights the state’s country music house’s future growth potential . Sales volumes are up 30% year over year and days on market are down 54% from a year ago, which ties into its most positive sign for investors – how properties for sale are severely undersupplied compared to pre-pandemic levels.

“When you combine low inventory, faster sales and more purchases, it indicates an upward price trend. Tamworth’s extremely low vacancy rates, well below 1%, will lead to higher rents, so we can expect Tamworth ownership to be on an uptrend,” he said.

Bundaberg, Qld:

An attractive and affordable coastal lifestyle is one of Bundaberg’s main attractions. Single-family homes average between $580,000 and $750,000, paired with their proximity to the SunshineSun, NSW Sun, VIC Coast, make it a feasible option for many buyers. He particularly pointed to the Bargara region, where property prices have soared 32% over the past year, as opposed to Bundaberg’s 30% growth over the past decade, as an area to watch. for investors.

He pointed out that, for investors worried about rising interest rates, low inventory levels, near-zero vacancy and a market that has seen no recent movement, rents could increase by $50 to $100 over the next 24 months.

Toowoomba, Qld:

An infrastructure boom is a major contributing factor to Toowoomba’s inclusion on the list. From the major domestic rail project and the redevelopment of the Toowoomba hospital to the creation of cannabis production facilities and more than $1.8 billion in energy projects, the diverse portfolio of local projects increases the quality of life of the region and its attractiveness for investors, according to Mr. Palwal.

“Toowoomba offers its own CBD experience and is within commuting distance of Brisbane, while providing greater accessibility for shoppers,” he said. He also explained that the city is one of the best-selling regions in the country, before adding that extremely low vacancy rates could drive up rents by $50 to $100 a week over the next two years.

“When you combine affordability, a diverse and strong infrastructure pipeline, rising rents to fight interest rates, and also strength in the local labor market, it offers a very positive outlook for investors,” he concluded.

Barossa Valley, South Africa:

The Barossa Valley, located an hour from Adelaide, offers living space and affordability along with a deep-rooted food and wine culture, aided by the area’s well-known vineyards.

Mr Paliwal explained how Barossa Valley’s ‘current rental vacancy is extremely close to 0% with agents seeing over 10 rental applications within a short time of being on the market’ makes the area incredibly attractive to investors .

Additionally, increased levels of infrastructure, which includes “Twin Creek Wind Farm being developed and a new six-star hotel being approved for development,” will propel the Valley further in the spirit. of Australia and increase its global appeal.

Albury-Wodonga, Vic:

Mr Paliwal advised investors not to be deterred by the massive boom that has taken place in this border town over the past decade. He explained how, with home prices ranging from $480,000 to $600,000, it still offers investors affordable options, and its tight rental conditions, strong job market and forecasts of further rent increases in make a favorable center for investment.

“Albury-Wodonga will become a key hub as part of the long-term Inland Rail, a 1,700km freight rail network that will link Melbourne and Brisbane via the regional regions of Victoria, New South Wales and Queensland,” he said.

From his point of view, “this will have a favorable impact on local businesses and will further facilitate the movement of their goods in major cities”.

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5 regional markets defying the downturn in the real estate market



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Last update: July 20, 2022

Posted: July 21, 2022