Why it’s worth digging a little deeper for regional real estate gold
As prices falter in Australian capital cities, regional areas continue to offer good value, if you know where to look
2 min
It could be argued that the 2022 real estate rollercoaster of the Australian property market has not been felt harder than in regional areas, with CoreLogic’s Regional Market Update reporting several areas that experienced the strongest growth now seeing the fastest declines.
The update, which examined 25 of Australia’s largest non-capital city regions, showed that house values in six of the most popular lifestyle markets had fallen by -6 percent or more, with NSW regions such as the Southern Highlands and Shoalhaven recording some of the greatest losses.
However, founder and director of Aus Property Professionals, Lloyd Edge says canny investors can still make money in regional areas if they know where to look, citing Gunnedah in NSW, Highton in Geelong and Sebastapol near Ballarat as areas tipped for growth.
He shares his regional property insights here with Kanebridge News.
What should investors look for in an investment in a regional area, given the post pandemic price drops so many areas have experienced?
I would recommend looking for a 5%+ rental yield, as the extra cashflow will improve your serviceability with lenders. I would also look for a location with multiple growth drivers, as well as Government spending on infrastructure, close to schools, hospitals and so on. A history of growth pre-pandemic is also important, as pretty much all locations experienced growth during the pandemic, but to ensure you’re buying a good long-term investment you need to look for a long history of growth in the area.
It’s also important to ensure you’re buying a property below the median house price in that area, and that you understand the demographic you’re buying for. For example, many regional areas are popular with young families who want to live in a house, therefore buying an apartment might not be the best choice of investment.
Are rental yields performing better in regional markets than capital cities right now?
Yes, in general rental yields in regional markets are performing better than in capital cities right now, especially those regional areas where the median house price is below $500,000. Of course, there are still capital cities like Darwin that are doing very well in terms of rental yields.
What about rental yields versus capital growth?
After the pandemic property boom, growth in many places has slowed down considerably, and rental yields are performing well in areas where the median house price is still below $500,000. However, this doesn’t mean that you should buy only for rental yields right now. It’s important to always look for a balance between rental yields and capital growth. A high rental yield will improve your serviceability with lenders and help you to keep growing your portfolio, however without capital growth you won’t be able to leverage the equity down the track to keep growing your portfolio and reach your financial goals.
Why would investors be advised to look beyond the usual regional suspects?
Once a location becomes popular with investors everyone rushes to buy there, causing prices to rise and putting a downwards pressure on rental yields. It’s therefore important to look beyond the usual regional suspects when choosing a place to invest. I would advise staying up to date with the current supply and demand data, so instead of following the trend and buying where everyone else is you can be aware of the next location that is set to see some growth.
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
The harbourfront estate has views of the Sydney Opera House and can entertain up to 500 guests
2 min
A Sydney waterfront mansion that has just hit the market could set a countrywide price record as the first home to sell for A$200 million (US$129.77 million).
Located in the affluent suburb of Point Piper, the sprawling home sits on a lot that’s equivalent to “four normal housing blocks” and features 98 meters (321.5 feet) of water frontage along the harbor, according to an announcement on Wednesday from Ken Jacobs, director of Australia Pacific of Forbes Global Properties, who has the listing in association with real estate agent Brad Pillinger.
“The estate is Australia’s most iconic residence and ranks amongst the best in the world, combining both privacy and space, exuding elegance and comfort, while featuring gun-barrel views of the Sydney Opera House and the Harbour Bridge,” Jacobs said in a statement.
The residence is expected to sell for A$200 million or more, Pillinger added. “There is no comparable property in Australia.”
The home, named Wingadal, as it’s located on Wingadal Place, was built for Aussie Home Loans founder John Symond, who purchased the property in 1999. It took eight years to complete the mansion, which was designed by architect Alec Tzannes, according to the listing agency.
“Wingadal is a highlight of my career in residential design and architecture,” Tzannes said. “The timeless design on the Point Piper peninsula offers a unique appreciation of Sydney Harbour from a variety of angles, rotating around an axis that lines up perfectly with the Sydney Harbour Bridge.”
The colossal home has enough internal space to entertain up to 500 people, and underground parking provides space for 20 cars, plus eight more can fit inside the garage.
The four-level home has four bedrooms as well as a two-bedroom apartment. There’s also a 2,500-bottle wine cellar, a home theater that seats 22, two commercial kitchens and a swimming pool.
“Wingadal has been a special home for my family over the past two decades, and now I’m looking forward to spending more time traveling overseas,” Symond said in a statement. “While being an exceptional family home, we have also enjoyed hosting many important events for charities and other worthwhile causes.”
This is not the first time Symond has tried to sell his waterfront estate. In 2016, he listed the home in hopes of selling it for at least A$100 million, which would’ve been a price record for the country at that time Mansion Global reported . The current benchmark was set in 2022, when a baronial-style estate, also in Point Piper, sold for A$130 million, according to The Sydney Morning Herald .
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
This stylish family home combines a classic palette and finishes with a flexible floorplan
