Rising property prices across the nation are encouraging many home buyers to look at purchasing property in regional areas. As a result, commuter towns situated just outside of Australian cities listed in the top regional growth areas. For instance, six regional areas situated just outside of Sydney are in the nation’s top ten regional growth areas. Why? Well, let’s look at the data.
Capital city home prices jumped by 1.4 percent in February 2017, according to CoreLogic Data. These price increases occurred because of greater investor activity spurred on by 2016 rate cuts. Before 2016 rate cuts, property price growth eased to an annual rate of just 6 percent.
An analysis of regional growth areas by CoreLogic shows the top ten regional areas have increased considerably in price. While most of these locations are within 200km of the CBD area, some are up to 1100 kilometres away. This analysis considered regional areas with at least ten sales over the year to January 31st, 2017.
|Top 10 Regional Growth Suburbs at 31st January 2017|
|Town||Distance to CBD||Annual Growth||Median Dwelling Values|
|Stanwell Park (NSW)||45KM||59.90%||$1,575,000|
|Falls Creek (NSW)||138KM||55.40%||$777,000|
|Denham’s Beach (NSW)||228KM||48.78%||$457,500|
|Bluff Point (WA)||376KM||42.65%||$485,000|
|Richmond Hill (QLD)||1072KM||41.67%||$233,750|
Source: CoreLogic RP Data
The Attraction of Buying in Regional Locations
Apart from more affordable buying prices, regional areas classified as commuter towns with booming resources provide buyers with quality property. Therefore, properties have median values that are well below city prices, making them extremely attractive for many buyers.
Regional areas also offer high yields, both in terms of capital and rental growth. However, it’s important buyers know the risks population growth in these areas is slower than cities and plateaus over decades. Thus, it’s vital to conduct adequate research before buying as some regional areas are booming. Consequently, regional centres with a rapidly rising population growth and large-scale infrastructure development are the ones to watch. When there’s significant infrastructure planned, this is an indication that growth is here to stay. So, review council and government plans and keep an eye on proposed development.
Another key is the local economy. Markets where the growth in median household income is higher than inflation is a key indicator of this. As is the introduction of new business to the area, especially big business such as large chain stores.
The Top Two Regional Growth Suburbs
Stanwell Park, situated north of Wollongong topped the list of regional growth suburbs. With a median buying price of $1.5 million, this area has a median rental price of $725 per week. The market also has an extremely high demand. At present, the area attracts four times the amount of interest that the average property does in New South Wales. Home medians in this area jumped by 59.9 percent. Subsequently, this increase is due to the area being within 50 km of Sydney and located on the coast. The majority of residents here work in the Sydney or Wollongong metropolitan areas. Plus, the proportion of residents whose income is above $3,000 per week is over double the Australian average.
Falls Creek, on the other hand, experienced property price growth of over 55 percent. This region, situated in the Alpine snowfields, is a popular tourist destination. While this area has a relatively low population, it swells during peak times and has a strong economy as a result. Overall, this area generates around $10 million in government revenue. Furthermore, the development of infrastructure is ongoing due to government wishing to enhance visitor experience and develop holiday accommodation.