How the ‘Asian century’ is creating a property boom in regional Australia
Many property investors still prefer to purchase real estate assets in capital cities, but Propertyology’s Simon Pressley believes that the rise of the “Asian century” in Australia proves that there are lots of gold to be found in certain regional cities.
Years of working in a property market research company taught Simon that capital cities don’t always make a blue chip. “It often means it's expensive… but it doesn't give us [the assurance] that it's going to be the best performing property market,” he explained.
According to Simon, around 80 per cent of all new dwellings approved in Australia over the last three years have been in the country’s eight capital cities, but these areas only accommodate 65 per cent of the population.
While the remaining 35 per cent of the country’s population resides in regional Australia, the new dwelling supply has only been at 20 per cent. This demand for accommodation continuously increases as Australia plays a big role in the rise of the “Asian century” which paves the way for the expansion of several industries including tourism and agriculture.
Simon explained: “[The Asian century will] create jobs, create demand for accommodation—another reason why we're honing in on some parts of regional Australia.”
Moreover, many Asian students are now picking Australia for tertiary education. After years in university, most of them will remain in the country to establish a career.
“[Many] strong regional centres really play the role of a mini-capital city [and they] have strong tertiary education facilities. In some cases they're expanding—extra jobs are created with the construction of these big infrastructure projects,” he said.
“[There are] extra teachers that they employ which need to live somewhere, [as well as] the extra students [who need to] call those cities home.... We're big fans of regional Australia.”
However, despite the great potential of regional cities, Simon reminds property investors to still be careful when choosing properties to buy. After all, no asset is ever a guaranteed safe investment, no matter where it is located. For him, the ultimate secret to success in property investment is opening one’s self up to as many opportunities as possible, all while minimising risk through proper education and good mentorship.
“You know, Perth and Darwin are now in their third year of decline, so it's a furphy to say that capital city means blue chip. Every capital city has had periods of decline before and will again in the future,” Simon said.
“So, the investors need to take the blinkers off. Australia's a really, really big country and there's lots of gold to be found in certain parts of regional Australia.”
Tune in to Simon Pressley’s episode on The Smart Property Investment Show to know more about his advice for do-it-yourself investors as well as his checklist for what investors should consider when looking to regional towns for their next investment.
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