Some regional areas across Australia have experienced property growth over the past two years, with population in regional areas also growing, according to Australian Bureau of Statistics (ABS).
Figures from the ABS also showed that the country’s population is set to double by 2075. The growth won’t be exclusive to capital cities, as regional areas will also experience the increase. As such, the increase in population may provide more property investment opportunities to cater for the growing population.
This means investing in a property in regional areas may be worth your while, as an increasing population means an increase in housing demand.
However, as with property investment in capital cities, there are many factors you have to carefully evaluate before taking a plunge into a regional area’s property market.
Here are five things to consider before investing in a property in a regional area:
- Affordability. Housing values in regional areas are comparatively more affordable than those in the metro areas. The affordable price tags of regional properties are due to relatively low supply and demand.
Analyse the value growth in regional markets to see up-and-coming regional areas and suburbs and information their median prices. You may use our Top Suburbs page to view a comprehensive profile of your desired suburbs.
- Cash flow. Property investment in a regional area may give you positive cash flows. For example, regional areas such as Cairns, Townsville, and the Hunter region have the highest average rental yields in Australia, according to CoreLogic. Regional locations may be solid options for investors seeking higher rental returns.
Another example: In the last three year, the property markets in Burnie and Launceston outperformed Brisbane, Perth, Adelaide, Sydney, and Darwin, according to Propertyology managing director Simon Pressley. In contrast, Moranbah and West Gladstone in Queensland recorded more than 40% decrease in property value, according to Domain.
- Lifestyle. Regional areas are perfect for getting away from the hustle and bustles of the city. Most regional areas are close to nature, have open spaces, walking and cycling trails, reserves and beaches. Regional areas offer a change of lifestyle especially for families who want to escape the cities.
In fact, some wealthy Aussies are splurging for luxury homes in NSW and Victoria regional markets, the Australian Financial Review reported. For example, a 155-hectare property in Kangaloon was sold in August to tech billionaire Mike Cannon-Brookes for $14.5m.
- Infrastructure development. Infrastructure projects have made regional areas more practical as a place of residence, with highways and motorways all over the country receiving upgrades. Regional suburbs have also been better linked to the city, with the government investing $100bn over 10 years beginning 2019-20 in transport infrastructure across the country.
A quick google alert notifying you about news regarding infrastructure or economic development in regional areas may help. You may also visit the following government websites to get the latest information:
- Department of Infrastructure, Transport, Cities and Regional Development
- Regional Australia Institute
- Tourism Research Australia – Tourism Regions
- Regional Development Australia
- Economic growth. The economy in regional areas continues to improve, with many suburbs maximised and developed. Local regional economies have created thriving, sustainable communities.
For instance, a comprehensive Regional Aviation Policy statement is set to be developed by the Federal Liberal and Nationals Government, in partnership with airlines, regional airports, local council owners, state and territory governments and local communities. It is part of the government’s commitment to securing economic growth across remote and regional Australia through a strong aviation sector.
Regional deals have also been rolled out, which area genuine partnership between all levels of government to work towards a shared vision for productive and liveable regional areas. The deals are tailored to each region’s comparative advantages, assets, and challenges. They reflect the unique needs of regional Australia.
Tourism in regional Australia is also on the rise, with a 5.6% growth in visitation per annum over five years, according to Tourism Investment in Regional Australia.
If investing in a regional property tickles your fancy, consider watching out for value growth in your prospective area before taking the plunge. Other things you may do to determine whether it’s worth your while to enter a regional property market are:
- Watch for employment opportunities. Employment is closely link with the property market. Simply put: without a job, a person may find it difficult to pay for rent or a mortgage. You may check the Australian Bureau of Statistics for Employment and Unemployment rates.
- Monitor the area’s population growth. Population is also closely linked with the property market—it’s simple supply and demand. The more people are in the area, the higher the demand for housing may become. Between 2017 and 2018, the number of people living outside of capital cities increased by 83,200 or 1%, according to ABS. You may keep up to date with the latest population report by visiting’s ABS’s official website here.
- Look at the data. Use our property market report to further monitor your prospective regional area’s real estate market. You may also use CoreLogic’s Home Value Index to see the dwelling values in regional areas.
Media releases and statistics released by various industry organisations and institutions are also a good reference in evaluating a regional market:
- Property Council of Australia
- Housing Industry Association Australia
- Real Estate Institute of Australia
- Real Estate Institute of Victoria
- Real Estate Institute of Queensland
- Real Estate Institute of Australia
- Real Estate Institute of New South Wales
- Real Estate Institute of Tasmania
- Real Estate Institute of South Australia
- Real Estate Institute of Northern Territory
- Real Estate Institute of Western Australia
Regional areas may offer some untapped potential when it comes to property investment. However, you have to be cautious and do your due diligence before purchasing real estate, as investing in a regional area—as with most investments—comes with risks.
These risks may include:
- Capital growth prospects may be lower compared to capital cities due to supply and demand
- The population may drop quickly should employment decrease
- In mining areas, investment may be risky as supply and demand are volatile
Before entering the regional property market, it may be ideal to consult a professional and discuss your options. An expert may be able to help you weight the pros and cons that a regional property investment have.