How are the regionals doing?

I stopped reading when i saw terry ryders face

 

Interesting read, was actually considering Hunter Valley myself....

 

Just my 2 cents. Vacancy rate in Bendigo is very low you will have no problem renting an investment property here. I believe it’s a combination of a number of factors. Population growth, APRAS squeeze on investors has driven a lot of investors out of the market either by making it much to difficult to get finances or by banks increasing their interest rates to investors or getting rid of IO loans. This has led to I believe a reduction in rental properties in Bendigo.

 

Compared to 2 years ago, Bendigo's housing stock has certainly reduced substantially. It's very easy to rent out an investment property now - a real plus for any property investor.

Bendigo looks likely to do well in the near future and deservingly so as it has suffered stagnation in house prices for years.

To those who have missed out buying in Geelong and is feeling harder to buy in Ballarat, Bendigo offer the next best alternative. I feel the next 6 months will be the last opportunity to buy before price starts to really shoot up.

 

As readers would know I'm a big fan of regionals...especially large NSW regionals such as Orange and Bathurst and Dubbo.

Good sized blocks with low land costs so you can hold multiple properties and stay well under the NSW land tax threshold of 629K
Granny flats allowed under NSWAHSEPP. No council approval required. Private Certifier only.
Prices are up @10% in the last 12 months
Rents are up @ 8% in the last 12 months
Just great going, all around.


So whats happening?
Besides the fact larger regionals are defying the trends of net migration losses that hurt smaller regionals , and have been seeing net increase to population for the best part of the last 5,6,7 years, I believe there is a clear trend forming around affordability and lifestyle . Young families priced out of big cities are looking elsewhere and the first generation of wealthy retirees cashing out of the bigger cities are looking to move elsewhere.

The main beneficiaries are coastal of course. Port macquarie, Coffs Harbour, South Coast, Gold Coast, Noosa, etc etc etc....there are certainly more sea changers than tree changers, but the trend is still material enough to drive stable growth and rental growth in the larger inland regionals


For example - I know that they have been building over 200 new homes in Orange each year for the past 2-3 years, yet rents are climbing and rental vacancies are falling. So it's clearly not investors buying there - its young families and tree changers. During that period Orange has seen population growth averaging @ 1% per annum. Doesnt sound like much but thats the same as 50,000 new residents in Sydney or Melbourne ...

and I suspect as traffic congestion gets worse and worse in our big cities, more treechangers will make the move.

Same trends will be whats driving Bendigo.

if only the Govt allowed granny flats in VIC


Now...if they ever get high speed rail going - watch what happens to Goulburn, Wagga, Shepparton etc...

 

I'm also invested in Orange, Bathurst and Central West NSW. We are seeing some pretty low vacancy rates, significant capital growth, and as euro73 stated, a significant growth in population.
How long do people think this growth can be sustained?

The next big thing?

 

Parkes is doing well. It's sitting there between Orange and Dubbo but is doing well in its own right, having the inland rail work going on atm. As it's the hub of the action, I predict that it will continue to have modest but on-going growth for a while. Low vacancy and healthy rents are back.

 

Warragul and Drouin have moved semi in-line with Melbourne. But Traralgon, Moe, Morwell, Neerim etc haven't moved in a decade. Circa 230k for an established brick home on 800sqm block. If anything they were 250-260k a couple years ago.

 

moe and Morwell are too far from melbourne to get the proce boost and theres mo money coming from outside of the towns. Yields arnt that spectacular either so I'm not thinking much growth coming either
a lot of people from drouin and warragul work on the outskirts of Melbourne
Interestingly Moe bu the sea - Wonthaggi has been doing well the past 12 months which may have something to do with all the surrounding areas (all popular weekend spots) being quite expensive now.

Inverloch, Island, Kilcunda, Dalyston, Criminella etc

I wouldn't give up on Traralgon though it has potential

 

'More buyers than properties': Towns where house prices are outstripping of those of cities

 

Market Update: Orange 2017/2018

 

Surely there would be some sort of ripple form Melbourne if going by history. I know the area is Shh.. hole but prices have stabilised. When that plant shut down there were 3 bedders in morwell, the crap part of town $100 to 110 k now that are $120k plus

 

it's fine to say there is a ripple but there still needs to be a reason for someone to buy
coastal towns - cashed up city dwellers buying weekenders and retirees
largish regional centers- young people moving there as priced out of city suburbs
welfare towns - ? ? , only thing I can think is investors buying for rental yield. Once the rental yield gets too low where it is deemed not worth investing then prices wont go up any further
morwell and moe yield is both around 7% so at what point do investors stop investing in such a location.
For myself it would be 10% but I think 6% for most is ok.
so I'm thinking it's got 10-15% growth in it based on current supply and demand factors

I could be wrong but unless these towns suddenly become desirable alternatives to younger people then I don't see much action

 

Also I remember round about 5 - 7 years ago you could pick up a house in morwell fof around 70-80k
so it's actually done ok already

 

Morwell is 150km from Melbourne centre, 90km from Pakenham and just 50km from Warragul.

Any reasonable house and land in Warragul would cost at least $400,000 Now but once you enter into Morwell/Moe area, you can buy something half or less than half this price. The disparity is huge.

I know Morwell/Moe has a bad reputation of being places with little jobs and many migrants etc.. But as towns nearer to Melbourne gets more and more expensive, won't Morwell also experience a bit of the spill over effect? Honesty, where else can you buy houses at $120,000 to $180,000 on 600sqm land, in a reasonably sized town, surrounded by nice scenery, and just 150km away from Melbourne?

 

How bad is the cheaper part of town?

 

potentially will be interesting to see what happens

 

Go Orange, go... More than half of Central West’s population growth in north Orange

 

Yeah better than nothing . I'm currently looking at Colac too and agree about the dual carriageway. The commute into Geelong and Melbourne will be a heap better . I've watched the town grow for years . There is also quite a bit of industry there now as well .

Warrnambool however is becoming a hole with rising numbers of beneficiaries etc and the problem of being in a safe conservative electorate where not much govt spend happens . Own 1 property there , two in Mortlake and three near Camperdown . Ive only seen modest capital growth but good rental growth . Recently we had an open day for prospective tenants one morning and had 9 different parties look . Very few vacancies.

 

Got rid of mine in Warrnambool after holding it for about 4 to 5 yrs


10k rise on mine.

Minus agent fees and stamp duty, and any profit was gone