Over 100 markets with 200% growth revealed in new analysis
New analysis has located over 100 house markets that have recorded a price increase of 200 per cent or more over the last two decades.
According to research performed by Propertyology, 111 house markets have seen price growth at least triple over the last 20 years.
Using the baseline of areas with a population of 10,000 or more, Simon Pressley, head of research at Propertyology, said the most expensive at the time was houses in Sydney, priced at $220,000.
However, those who had purchased in popular regional areas could have seen similar growth Sydney saw between then and today, at a lower price point, he said.
While regional locations can be viewed as a “riskier” investment when compared with capital cities, Mr Pressley said the risk at hand is not necessarily tied to whether the investment is located in a capital city or not.
“For capital cities and non-capitals, the years when a location’s property market performs best are when local economic conditions and buyer confidence are strong, and vice versa,” Mr Pressley said.
“Generally speaking, locations with a more affordable median house price have more upside potential for capital growth. For that potential to be realised, the real skill is being able to identify the locations with positive leading economic indicators.”
The results of those positive leading economic indicators resulting in 103 regional cities and towns tripling in price over two decades.
The last 17 years show regional Australia’s population growing by 1 per cent per year, according to data from the Australian Bureau of Statistics, which Mr Pressley said was comparable to Adelaide and close to Sydney’s 1.4 per cent per year.
“The lifestyles, the infrastructure, the food experiences and the scenery in most regional locations is significantly better than what those who haven’t been there appreciate,” he said.
“Personally, I love investing in these locations. Instead of sinking large amounts of capital in to one expensive asset or loading up with multiple properties in the same city, I prefer to minimise my risk while taking advantage of more opportunities. It’s smarter to break the investment capital into smaller pieces and invest in multiple affordable properties in a diverse range of locations.”
Despite their past success, Mr Pressley warned that this analysis was not necessarily indicative of future success but was more focused on the fact that such success over a long period is possible in the Australian market.
“The most important lesson to learn from historical data was that 100-plus towns and cities produced great growth across two decades. While it occurred in different years for different locations, they all had stages of peaks, troughs and sideways movement,” Mr Pressley said.
“We’ve all heard the story about a one-industry mining town called Moranbah losing $200,000 in one year back in 2013, but Sydney’s pricey Inner-West, the so-called ‘blue-chip’ Balmain, also lost $225,000 over the 18 months subsequent to Sydney’s peak in August 2017.
“Frankly, in a country as big and diverse as Australia, I wouldn’t invest in Moranbah or Balmain; however, I suspect most people would be surprised to learn that the average annual change in median house price of their municipalities over the past 20 calendar years was 8.1 per cent and 7.8 per cent respectively.”
Currently, Mr Pressley said most Australians pay between $300,000 and $650,000 for houses in towns or cities with diverse economies, and regional locations are rife with both solid prices and economies.
“The research clearly shows that regional real estate has just as much potential as capital cities, which is why smart investors make an objective assessment of every location in Australia before buying,” he said.
The full list of locations where median house prices at least tripled, between December 1998 and December 2018, according to Propertyology:
|
State or Territory |
Area |
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New South Wales |
Sydney, Newcastle, Wollongong, Lake Macquarie, Central Coast, Mid Coast, Port Macquarie, Port Stephens, Wagga Wagga, Armidale, Tamworth, Shoalhaven, Shellharbour, Maitland, Cessnock, Tweed, Bellingen, Ballina, Dubbo, Bathurst, Orange, Cabonne, Eurobodalla, Bega, Byron, Albury, Goulburn, Kempsey, Clarence Valley, Lismore, Mudgee, Singleton, Richmond Valley, Kiama, Lithgow, Cooma, Nambucca, Hilltops, Broken Hill, Yass Valley, Inverall, Parkes, Scone, Narrabri, Cowra, Gunnedah, Murray River, Gundagai, Forbes, Wingecarribee |
|
Northern Territory |
Darwin, Alice Springs |
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Queensland |
Brisbane, Gold Coast, Sunshine Coast, Noosa, Gympie, Scenic Rim – Beaudesert, |
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South Australia |
Adelaide, Mount Barker, Alexandrina, Barossa, Light, Victor Harbour, Port Lincoln, Port |
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Tasmania |
Hobart, Launceston, Burnie, Devonport, Huon Valley, West Tamar, Central Coast, Meander |
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Victoria |
Melbourne, Surf Coast, Bass Coast, Geelong, Bendigo, Ballarat, Baw Baw – Warragul, |
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Western Australia |
Perth, Mandurah, Busselton, Albany, Margaret River, Murray, Dardanup, Harvey, Capel,
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