If you’re looking to invest in a property that you can be sure will rise in value, the property experts have one tip: don’t just invest in metropolitan cities.
“[One of the biggest myths in real estate] is that capital city property markets perform better than non-capitals (regional locations,” Propertyology managing director Simon Pressley told Yahoo Finance.
Instead, regional areas are where you should look: after all, investors who bought property three years ago in Geelong and Byron Bay will have seen their home values rise by 29.9 per cent and 27 per cent respectively.
Related story: RAPID RECOVERY: House prices gains largest in 16 years
But where will the next regional property hotspots be?
According to a report by Ryder Property Research managing director Terry Ryder, there are a few hidden gems in Queensland, Victoria, NSW and South Australia that home buyers should look out for:
1. Sunshine Coast, Queensland
This city has not only been dubbed the number one growth market in the Sunshine State, but also “one of the best in nation”.
The region will see a $20 billion spending boost in infrastructure and property development. “With a robust economy that has averaged growth of 4 per cent per year over the last 15 years, well above the national rate, opportunities to invest wisely continue to present themselves,” said Ryder.
Suburbs to look out for: Maroochydore south, Caloundra, Kawana
2. Bendigo, Victoria
Regional Victoria continues to kick goals and Bendigo has risen to the top of the pack. “Demand [is] rising in most of its suburbs, boosted by affordability.”
“The standout features of the Bendigo property market are affordability (houses typically priced below $400,000), strong yields (5–5.5 per cent is common) and some of the lowest vacancy rates in the nation (many postcodes are below 1 per cet).”
Suburbs to look out for: Eaglehawk, Flora Hill
3. Mackay, Queensland
“The recovery in Queensland’s resources-related centres is being led by Mackay, where vacancies are down, sales activity is up and prices are rising,” said Ryder. It’s also where Qantas’ Pilot Academy is based, giving the area a major boost.
“The previous boom in Mackay was heavily driven by mining. This time around, the local economy is carefully gathering impetus on a diversity of industries, not just coal mining. Construction, logistics, agribusiness and tourism are all contributing and providing employment opportunities.”
Suburbs to look out for: Andergrove
4. Latrobe Valley, Victoria
“Government spending is helping the Latrobe economy to thrive despite power station closures,” said Ryder.
“With several locations having median house prices below $250,000, affordability is a huge bonus, especially for first-home buyers.”
Suburbs to look out for: Traralgon, Churchill, Moe, Newborough
5. Queanbeyan-Palerang, NSW
According to managing director, Queanbeyan has the ‘best of both worlds’: it’s technically part of NSW but it’s also effectively part of the Canberra metro area.
“Queanbeyan has an advantage over it’s neighbour Canberra - NSW stamp duty concessions for first-home buyers. These, together with lower property prices, entice young buyers to cross the border - knowing that Queanbeyan is just 20 minutes’ drive from central Canberra.
“Good rental yields are another attraction, with several suburbs having median yields around 4–5 per cent for houses and above 6 per cent for units.”
Suburbs to look out for: Central Queanbeyan
The area is staging a huge comeback, Ryder said. “Confidence is returning to Rockhampton, evidenced by rising sales numbers, rising rents and low vacancies.
“It has appeal as an important regional city with a diverse economy, affordable real estate and high rental returns.”
Suburbs to look out for: Yeppoon
Suburb to avoid: Depot Hill
“Ballarat is a leader of the buoyant Victoria market, boosted by investors and home-buyers from Melbourne seeking affordability and lifestyle close to the state capital.”
Median house prices here range from $290,000 to just under half a million, which makes it an attractive and affordable lifestyle alternative to Melbourne, Ryder said – and one where the property market is earmarked to become busier.
Suburbs to look out for: Sebastopol
8. Townsville, Queensland
The city has just come out of a rough downturn, but it’s set for a “strong recovery” with over $25 billion in investment in the wings.
“There are large mine developments, including Adani’s Carmichael coal mine, which will be headquartered in Townsville; a $250 million sports stadium; a $1.9 billion CBD makeover; a $1.9 billion educational hub being driven by James Cook University; and $6.5 billion to be spent on residential developments.”
Suburbs to look out for: Kirwan
9. Parkes, NSW
This regional hub enjoys a vibrant local economy, Ryder said.
“With the local council upgrading community facilities in readiness, contractors and workers have come to town, contributing to the local economy through both personal and business expenditure.
“[It] will go to another level with the impact of the Inland Rail Link, as Parkes is a key location for this pivotal infrastructure project.”
Suburbs to look out for: Orana, Parkes Central West
10. Port Augusta, South Australia
This area will see coal-fired power stations close, but will also enjoy a boost from energy projects of over $5 billion. “Prices are low and yields high,” Ryder added.
However, investors of this area will have to be in it for the long haul, he cautioned.
“These projects are yet to take off, which is why we have classified Port Augusta as a “long shot” in the past – a location which may prosper in the future IF some of the proposed energy and resources developments get under way.
“But the number of significant projects being targeted in and around Port Augusta has grown to levels that suggest that major economic growth is inevitable in this region,” he added.
“Investors should remain mindful, however, that this location has a heavy reliance on the resources and energy sector, and buying there has elements of risk.”