Tuesday, June 25, 2024

Young Aussies turning to regional property to secure their futures

Must read


By Carina Stathis For Daily Mail Australia

10:57 27 May 2024, updated 11:13 27 May 2024



Young Australians looking to get onto the property ladder are finding their only option is to buy in regional areas thousands of kilometres from where they live.

While it’s not exactly a desirable path – and few are likely to take the plunge – experts predict these buyers will reap the financial benefits in years to come.

It comes as first-home buyers continue to struggle to purchase properties in the capital cities, with the median house price in Sydney being more than $1.6million.

Sydneysider Poppy Whale, 21, was able to buy her first property – a three-bedroom home worth $386,000 – by expanding her search to Geraldton, a regional coastal city with a population of 40,000 located 420km north of Perth.

Stephanie Cortis, 28, also from Sydney, took a similar path by buying in Gracemere, a town with a population of 11,000 located 9km west of Rockhampton, Queensland.

These two young women share a similar dream: to be financially secure and hopefully retire early.

Poppy Whale, 21, bought her first three-bedroom property for $386,000 in Geraldton, Western Australia, after realising she couldn’t afford to buy in Sydney
Stephanie Cortis, 28, decided to expand her portfolio by investing in Gracemere, Queensland

Poppy, a HR associate, started searching for properties in February and quickly realised she couldn’t afford to buy in Sydney, so started looking elsewhere. 

With help of a buyer’s agent from Compound Property, she ended up purchasing a 700sqm property on the other side of the country – and a four-hour drive away from the nearest capital city.

‘I travelled a few years ago but now want to use my money wisely to benefit long-term,’ Poppy told FEMAIL.

The 21-year-old started working full-time eight months ago and has been saving since she started working a casual job at 14.

She managed to pull together a $65,000 deposit and knew she needed to use it wisely.

The property was settled earlier this month and Poppy is still coming to the realisation she is now a landlord. 

In just over 12 months, the value of her property has increased by $101,000, having previously sold in January 2022 for $285,000. 

Poppy bought her property (pictured) with a $65,000 deposit. In just over 12 months the property price increased $101,000 as it previously sold for $285,000 in January 2022
Steph’s investment property (pictured) is positively geared and she was also unable to afford buying in Sydney

Steph bought her first three-bedroom property in western Sydney in 2019 while living at home, and purchased her second in regional Queensland while renting. 

Despite having two mortgages, she isn’t feeling the pinch financially and is still able to go on overseas holidays thanks to her six-figure marketing manager income and positively geared properties.

‘Money isn’t a deterrer – I still live my life and go out with friends, but I’m not a big spender either,’ she said. 

‘I’m really savvy when shopping and hardly ever pay full price for clothes. I only splurge on special occasions, like if I get a bonus at work.’ 

Steph said she’s happy ‘rentvesting’ by living in Sydney’s eastern suburbs and buying elsewhere because she’s able to live the lifestyle she enjoys while also investing in property.

She also commented on the current state of Australia’s property market and the shift in behaviour of some buyers.  

‘I think it’s important to keep your ear to the ground and work with advisors to help give you a leg up rather than wallow in [the] fact you can’t afford certain cities like Sydney,’ she said. 

‘I’ve even spoken to friends who are thinking of investing overseas.

‘There’s this big move away from buying a property to live in and instead have investments behind you. Gone are the days of our parents who purchased huge properties and worked to pay it off.

‘Now a lot of people are diversifying their portfolio to leverage their money over time.’

Poppy and Steph are examples of young Aussies who have decided to invest in regional areas of the country to get onto the property ladder
Steph said, ‘There’s this big move away from buying a property to live in and instead have investments behind you. I’ve even spoken to friends who are thinking of investing overseas’

BIG PRICE RISES TIPPED BY 2027

SYDNEY: $1,933,500

MELBOURNE: $1,278,500

BRISBANE: $1,207,700

PERTH: $1,049,400

ADELAIDE: $954,300

HOBART: $855,700 

DARWIN: $695,600 

CANBERRA: $1,170,700 

Source: Oxford Economics Australia predictions for June 2027 as part of its new ResRadar service  

Ben Carrington, a buyer’s agent at Compound Property, told FEMAIL there’s a few reasons Aussie buyers are turning away from cities. 

‘I think there is more awareness now of the opportunity to invest outside of where you live. Technology, podcasts, education and the available data has made it a lot easier to research and to purchase interstate,’ he said.  

‘As our major capital cities have grown in value to somewhat unaffordable levels it has also forced a lot of young investors to look into different regions that provide much more affordable options with typically better cash flow and good growth potential.’

Mr Carrington touched on rising property prices in regional areas. 

‘Investing in regional, more affordable areas gives investors the opportunity to get into the property market and start to build their portfolio,’ he said. 

‘For those that have over the last few years there has been significant capital growth and with the low vacancy rates have also seen a large increase in rents and we expect that trend to continue.’

Click here to resize this module

He said investors are currently most interested in Queensland, Western Australia and South Australia. 

And while all hope is not lost for those hoping to buy in Sydney or Melbourne, Mr Carrington warned it’s ‘definitely getting a lot harder’ in those cities. 

‘It was recently reported a couple would need to earn $293,578 be able to afford a mortgage on the median house price in Sydney. Melbourne was less at $189,962 but it is still a large income and doesn’t include the amount of deposit needed to save also,’ he said. 

‘In saying that, one of the most common goals of our clients is to buy the dream home in Sydney or Melbourne and they use the “rentvesting” strategy to get there.’

What are the best-performing regional suburbs in Australia?

NSW: Sydney is one of Australia’s most buoyant property markets, but Regional NSW remains decidedly lukewarm. The best suburbs in Regional New South Wales to invest in this year include Charlestown, Dapto, Coffs Harbour, East Gosford and Heddon Greta

VIC: Regional Victoria has moderate ratings on all five metrics and has a similar assessment to NSW, but is well behind Queensland, Western Australia and South Australia. The best suburbs to in regional Victoria to invest in this year include Bairnsdale, Castlemaine, Darley, Eaglehawk and Maiden Gully. 

QLD: There are plenty of great locations in regional Queensland where you can buy a home for less than $441,258. The best suburbs at an affordable price that have been performing well over the last 12 months include Berserker, Boyne Island, Bucasia, Dalby, and Kin Kora

WA: Regional Western Australia is currently one of the top performing states in the country. Top affordable suburbs include Carey Park, Geraldton, Kalgoorlie and Mandurah (for units) 

SA: Regional South Australia is also increasing in popularity among investors as population and infrastructure is increasing. Top suburbs include Mount Gambier (for units), Port Augusta, Port Pirie, Renmark, and Whyalla Norrie 

TAS: Tasmania isn’t as high compared to WA, QLD and SA, but is still worth considering. Top affordable locations that have performed well over the last 12 months include George Town, Mayfield, Ravenswood, Shorewell Park and Upper Burnie

Source: Canstar 

Latest article