Firstly, regional NSW is generally cheaper and often produces greater rental returns than cities like Sydney.
Take Broken Hill. The latest RP Data research suggests that the median house price is a highly affordable $119,000 and the current gross rental yield is a strong 10%.
Despite warnings to the contrary, the resources boom is continuing, and new mining ventures are still going ahead. Broken Hill is also increasingly diversifying its economy. Residential real estate expert Terry Ryder says that the tourism, the media and the arts scene are experiencing growth in this area.
However, the key drivers of growth for mining towns will always be the mines themselves. And if they close down, jobs and economic growth can go along with it, says NextHotSpot. com.au director Andrew Peterson.
“Because mining towns are small, they are prone to huge swings,” says Peterson. “You don’t see that in a massive centre like Sydney.” Peterson believes that Sydney’s proximity to jobs and transport – particularly the railway lines – means it generally should be a steady spot.
“People want to be close to the action. The really expensive suburbs like Vaucluse or Bellevue Hill or Mosmon are pretty close to the city,” he says.
7,000 reasons to move to the region
Late last year, the NSW government has recently announced it will offer $7,000 to city renters who buy property in rural areas, as part of an update to their regional relocation grant scheme.
But Peterson says that the slow take-up of similar government grants aimed at Sydney residents is evidence that more must be done to attract people to the region.
Whether it’s in the city or region, he cites infrastructure, education and medical facilities as more effective drivers of population growth. And some of those drivers are what mining towns are lacking, or at least perceived to be lacking.
Peterson claims that because mining towns are seen as blokey and boozy they generally don’t appeal to mothers who desire other attributes such as quality education, hospitals and restaurants.
“If you don’t get families going there, you don’t get a mature market,” explains Peterson.
“You might get price spikes. If you can see this coming you might want to get in and get out, which I would call trading rather than investing.”
Young
The Cherry Capital of Australia, otherwise known as Young, is a country town in the South West Slopes region of NSW. Despite hosting the National Cherry Festival in the summer months each year, when the influx of tourists means the population virtually doubles in size, Young deserves to be looked at for other reasons besides fruit picking.
“The aged-care facilities are second to none,” says Colin Durham, principal of LJ Hooker Young.
Indeed, the Young District Hospital has only been open since 2004 and includes the Mercy Care Centre, which specialises in geriatric management and rehabilitation. Since the bigger regional centres such as Wagga Wagga, Canberra and Orange are all a good two hours’ drive away, residents from nearby towns are increasingly choosing Young for their hospital, shopping and recreational needs.
The town also boasts wheat production, sheep, cattle, an abattoir that is about to reopen, and one of the biggest clusters of large piggeries in the state – not to mention the new Young Sports Stadium and a range of primary and secondary schools that have new affiliations with both the local TAFE College and Charles Sturt University.
The international oil refinery company Hydrodec has also made Young its home, as have a range of national and locally owned businesses in the thriving retail centre. To get around, there are community buses, trains and even private planes that can take you to Sydney or Melbourne. It all contributes to a strong and stable economy, no matter what part of the town you live in.
The median house price in Young is an affordable $240,000. For around that price, you could purchase a three-bedroom brick veneer house that might be about 20 years old. For something a bit more modern, expect to fork out anywhere between $300,000 and $350,000 for a four-bedroom, two-bathroom house. Currently, gross rental yields are a healthy 5%.
