Property experts know that the real value for investors lies not in Australian capital cities, but in regional areas.
In fact, CoreLogic figures show that the most profitable property markets in the last three years have been in areas like Geelong, Hobart, Byron Bay and Ballarat.
According to Ryder Property Research managing director Terry Ryder, there are a handful of regional hotspots that are set to boom – but there’s one in particular he’s been recommending for a long time.
“We’ve been telling our customers for the past two years that the outstanding property market in Australia is regional Victoria,” Ryder said.
He added that several data sources have pointed to regional Victoria as a source of affordable property, good rental yield and great capital growth.
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According to CoreLogic’s latest Pain and Gain report, 97 per cent of homes in regional Victoria sold for a profit – higher than Melbourne (96.6 per cent) and Sydney (92 per cent), and regional Victoria ranks third in the nation in terms of apartments.
Property prices across several regional Victorian locations, such as Ballarat, Geelong, Newborough and Mildura have recorded double-digit growth in the last 12 months.
“There is no other market jurisdiction in Australia that has delivered so many locations with double-digit growth in their median prices. Equally, Regional Victoria is a national leader on locations with strong long-term capital growth rates,” he said.
Behind the numbers
According to Ryder, the strength of regional Victoria’s property market is due to the economic strength of the southern state. CommSec’s latest State of the States report affirms Victoria as the strongest-performing state across Australia, with NSW – home to Australia’s economic powerhouse, Sydney – slipping to third place behind Tasmania.
“And partly it’s because Victoria continues to be the number one state for population growth, gaining significantly from both overseas and interstate migration,” Ryder said.
“Victoria’s ranking as the number one economy and population growth state isn’t just about Melbourne – the regions have been major contributors to the state’s success.”
Additionally, unemployment rates in regional Victoria are at 3.7 per cent, the lowest in the nation. The national jobless rate is 5.2 per cent.
Top five regional Victoria property hotspots
Home buyers or property investors looking to regional Victoria for capital growth should be eyeing Bendigo, Latrobe Valley, Portland, Ballarat, and Echuca, according to a report by Ryder’s Hotspotting.com.au.
As one of Australia’s strongest regional economies, business investment and high infrastructure in this area is creating jobs, which is subsequently lifting real estate activity.
Houses in this area are affordable, typically falling below $400,000, has strong yields of 5-5.5 per cent, and some of the lowest vacancy rates in the country.
Latrobe City has proven to be a winner of Melbourne’s growth to the east, where new jobs are being created, according to the report.
In this area, owner-occupiers compete with investors due to the area’s affordability and the country lifestyle.
House prices in many locations can fall below $250,000, making this area particularly attractive to first-home buyers.
Local businesses are lifting the economy in Portland, and it’s creating greater demand for real estate, with vacancies low and rent rising.
The seaside location, range of jobs and affordable housing makes this ‘steel town’ an attractive location, as well as its proximity to popular tourist destinations of the Twelve Apostles and the coonawarra wine district.
“Portland’s vacancy rate is among the lowest nationally and with properties priced in the $200,000s, it offers opportunities for first-home buyers and investors on a budget,” said the report.
High growth market Ballarat remains a strong performer thanks to the city’s “strong and diverse” economy and its proximity to Melbourne. Aussies can expect price growth to continue through to 2022, according to Hotspotting.com.au.
The state and federal governments are also planning to spend billions on upgrading transport links, making connections to Melbourne and Melbourne airport faster and commutes easier.
Suburbs in Ballarat have median house prices hovering between $300,000 and $485,000, making it an appealing alternative to Melbourne.
Echuca was named as Australia’s most consistent location in a recent edition of Hotspotting.com.au’s Price Predictor Index report, and has also been named as a strong performer by property experts Herron Todd White and CoreLogic.
The area is popular with tourists and is also part of a region that is a major producer of dairy products as well as peaches, pears and apricots.
Improvement in housing affordability in Echuca has made the area popular with retirees and those seeking a tree change, and median house prices have risen 8 per cent but remains affordable.
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