As most buyers give up on the possibility of an affordable property investment in Australia’s major cities, the prospect of taking their money out of town starts to look more appealing. With many inner city areas in Sydney and Melbourne commanding close to $1 million for even entry-level properties, those committed to property investment are having to evaluate their strategy. Investing in a regional area makes sense for those wanting to get into the property market faster, but there are also opportunities for remote investors, wanting to build their property portfolio in affordable and strategic ways.
As property prices continue to rise and lifestyle costs in heavily populated areas increase, investors are looking for ‘a sure thing’ – not only a palatable property price, but also the sense of a secure and sustainable investment in a growth area. Right now, certain areas of regional Victoria are ticking all of the boxes, with three of Melbourne’s major urban centres experiencing considerable growth at the moment and property prices yet to catch on. Melbourne’s largest inland centre Ballarat, along with Bendigo and Geelong have all shown growth, but housing has remained surprisingly affordable. The most recent REIV data shocked many with the news that median house prices in Melbourne had crossed the $1 million mark. When compared to a median of $375,000 in Ballarat and Bendigo and up to $475,000 in Geelong, and, all three cities showing more than 5% growth in 12 months, it’s clear to see why regional areas are amongst the hot investment property spots for 2018 and beyond.
In the last budget, the Victorian state government allocated more than $60 million to Bendigo alone and has made numerous commitments to regional growth through a range of projects and upgrades to everything from sports and leisure facilities to hospitals, memorials, airports and roads. Ray Ellis, First National Real Estate’s Chief Executive has his money on Bendigo as the next big thing for regional Victorian property investors. “Real estate markets are substantially driven by confidence and confidence is inextricably linked to employment security”, said Mr Ellis. “That’s what makes Bendigo such an attractive location for first home buyers to get a foothold in the property market”.
Geelong & Ballarat
Upgrades to infrastructure such as works on the Princes Highway and new project developments including the Keystone Business Park in Geelong are topping the $1.2 billion mark. While in Ballarat, almost a dozen major projects are in motion including the new state government Hub building to support the relocation of 600 employees, the major events precinct and numerous sports and leisure facilities upgrades. “Ballarat is Victoria’s fourth fastest growing regional city and offers everything that people relocating from Melbourne could possible want” said Mr Ellis. “The city’s success at delivering infrastructure such as health services, shops and community centres before houses makes it a stand-out location for those seeking a lifestyle, tree-change, or the ideal place to raise a family.”
The current progress in these towns is exactly the kind of growth property investors want to see in the region they are buying in – growth that will improve the value of their property in the long term but also secure their investment in the short to medium term as well. Regional lifestyles tend to be much more affordable too, with a dramatic change in the cost of living evident just 100 kilometres away from city centres. The additional advantage of all of this activity is of course the impact on local employment growth. Unemployment figures in Ballarat and Bendigo are hovering around 4.1 to 4.3% and Geelong is also lower on the comparative scale at 5.7%, while Victoria wide rates are sticking close to 6%. The considerable investment going into these three urban hubs and their surrounding areas in the coming years can only have further positive influence on employment figures, boosting the prosperity of the local economies and almost guaranteeing investors secure reliable tenancy and great rental yields.