The best and worst regional investments
The high costs of properties in Sydney and Melbourne are driving investors outwards, leading to an uptick in prices for adjacent regional areas, new research has found.
According to results from CoreLogic, which analysed 25 regional areas, the housing market outperformed the unit market, with 16 regions analysed recording growth in value, while nine regions saw a decline in value over the last 12 months.
Across the unit market, the results showed a relatively even positive and negative growth spread over the last year, with 13 regions increasing in value, while 11 regions saw a decline in value.
CoreLogic head of research Tim Lawless said, “Overall, our latest data points to an increase of value growth in regional markets, particularly those which are located adjacent to capital cities.
“As people are priced out of certain capital cities, buyers now appear to be looking to these adjacent regions.”
The research also showed that home owners whose wealth has increased, due to strong growth in capital cities, are moving into regional areas due to the wealth effect.
“Home owners in Sydney and Melbourne have seen a substantial rise in housing equity over recent years.”
“Subsequently, we are seeing some evidence that these buyers are starting to look for holiday and investment properties in certain regional markets, which is also providing an impetus for some of the value growth we are currently seeing,” Mr Lawless continued.
Queensland’s north, including Mackay, Isaac and Whitsunday, was the strongest growing sector, with an annual growth of 5.9 per cent in 2019, making it the strongest-performing area across the 25 regional spots covered.
The best-performing unit market was Launceston and the North East region in Tasmania, seeing values rise by 10.7 per cent in October, making it the best-performing market across all 50 house and unit regions.
In NSW, houses in Illawarra performed in equal contrast, with values down 5.9 per cent over the same period.
Units in Western Australia’s Bunbury region saw the greatest decline for the year, with values falling by 17.2 per cent in 2019.
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