Despite Australia’s property market softening over the first half of 2022, smaller capitals and undersupplied regional cities will continue to strengthen – albeit at a slower rate.
It’s important to note that the ‘property market’ is made up of many smaller markets, which all move at different rates. Many locations do not necessarily follow that of Melbourne or Sydney – and are often at completely different stages.
For example, let’s look at Perth. This is a city that has laid dormant from a growth perspective for the last 10 years, with a minimal uplift in growth (on average) compared to the east coast. However in 2022, these factors listed below are pushing house prices upwards in the west:
· 40-year low vacancy rate in the rental market caused by a housing shortage · Strong job market with the average wage higher than most other capital cities – driven by the large % of FIFO workers
· Economy remains strong and unaffected through COVID as WA managed the response to the crisis better (arguably) than it’s eastern state counterparts
Additionally, here are a few other regional areas that we expect to continue to grow over the next 12-18 months (in our opinion). This is based on key factors such as an undersupply in properties for sale and rent, booming local job markets, a strong outlook of infrastructure development, accessible lifestyle and affordability.
Victor Harbor, SA
Only an hour away from the centre of Adelaide, the seaside town on the Fleurieu Peninsula is a favourite for property buyers. With more living space and affordability than any other capital city could provide for the same distance, there is no doubt its value is increasing since the pandemic began. Additionally, with major infrastructure and road upgrades expected in the future, the accessibility from Adelaide to the southern region will become even smoother. Vacancy rate is 0.13% with only 4 properties currently available to rent. Additionally, the growth in the last quarter alone was 3.33% for houses with 12.45% increase in median house price in the last year. It’s on track for another year of double digit growth in 2022.
Bundaberg offers an attractive lifestyle of coastal living at affordable prices, with family homes averaging from $580,000-$750,000. An added attraction is its commutability to the Sunshine Coast. With Noosa and it’s surrounding areas almost ‘maxed’ out on growth, it’s no wonder the next regional hub north of the Sunshine Coast is experiencing higher demand.
This market hasn’t seen movement for a little while, so as vacancy rates start to drop and buyers get pushed out of the Sunshine Coast market, expect Bundaberg to appeal to families and FIFO workers chasing a more affordable existence
Much similar to Perth & Bundaberg, this regional area has remained rather flat for the last 10 years. It will be an interesting case study to see whether demand returns for the tropical location, however these key indicators suggest it’s in line for an upswing:
· Diverse economy – not reliant on mining or one industry · Rental yields are high, with the region being home to one of Australia’s military bases, enticing investor action
· Low entry point for houses. For example, buyers can enter the market for under $400k for a three- or four-bedroom home, 10 minutes from the CBD
· Key spending on infrastructure including a new sporting stadium, improvements James Cook University and road upgrades all bode well for growth Of course, there are risks with all regions and Townsville has had serious floods and cyclones in the past however we predict there is more upside in the capital of North Queensland that outweighs the climate risks.
Disclaimer: these views are opinions only and we recommend all prospective buyers undertake their own research and due diligence
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