NSW Thoughts on Orange, NSW?

Orange is an area we specialise in. Goulburn is the other. We have delivered many properties in Orange - everything from NRAS approved 1 bed villas to 3 bed townhouses, to Dual Occ's ... there is always strong demand from tenants. The yields are very good. I've long been a great advocate for good regionals, and their superior affordability and yield. I've long argued we were at the beginning of a demographic shift that would see younger people and tree changers start to favour these sorts of locations in larger numbers than most investors previously believed may happen.... and that the next census data would start to show the trend was well underway. Seems some data is starting to support that theory........

The 'golden demographic' is moving to regional Australia in big numbers

 

As a millennial with a young family , this is exactly what we did. So I support your theory

 

And, sales data for the year just published by Domain says that Orange has had the 3rd highest number of sales for any location in the country for 2020. Amazingly, new vacant lots are well over 300K now. When I posted in Feb 2020 that they had hit 240K and things were getting frothy, but suggested they may get to 280-300K... I was wrong. They are getting 330-350K... and that's IF you can even get a look in. You need to register to bid for them.... Westwinds Estate - Maas Group Properties - Orange NSW
We were paying just 195K for them only a year ago. Vacancy rates are now at 0.4% ..... my clients have picked up some nice growth and are getting superb yields

 

So glad I bought north of the CBD in 2011 for low $200K. Haven’t visited for a while but sounds like lots is happening with more to come. Happy Orange investor here

 

I've just had my Orange dual occ revalued. paid 575K Oct 2018. Revalued 790K this week.
I've also had my Orange 3 bedder ( one side of a duplex) revalued. paid 350K in 2016 revalued at 500K

 

Momentum26, how did you go finding decent areas?

 

@euro73 what do you think of Cowra area as an IP please?

 

Have never looked at it. Population is under 10,000 and with Orange and Bathurst relatively near , just haven’t really paid it much attention , as it’s unlikely to see the population grow enough to put real pressure on rents - which is what we look for . Does have a very low vacancy rate though , at 0.7% .... so might be worth a closer look

 

@euro73

I have been following your posts for a few weeks and looking into old threads, what are your thoughts on the current orange market ? I am looking for my first IP and like the idea of throwing a granny flat at the back for dual rental income, budget is up to 750k but would prefer to spend less if I could. Keen to hear your thoughts. Also happy to look at other areas but want to avoid negative gearing and focus on cash flow positive areas with low vacancy rates.

 

Still gangbusters. 600-650M2 lots on Miriam Drive selling for low - mid 300's.
https://www.realestate.com.au/property-residential+land-nsw-orange-202993442
I got my clients into 750M2 lots there for 190K just 18 months ago.

New development about to launch at Torulosa Way and most lots are smaller at 500-550M2, with the larger lots over 650M2 set to be priced at 345K +

Rents have also surged. Some of my clients have renewed granny flat leases recently - up from 265 to 290 per week. So Orange is still very very strong. It would take in the vicinity of 800K + to deliver a Dual Occ ( our proper full sized version at least, not the little boxy things you see jammed onto 500M2 lots in the Hunter and SEQld) in Orange nowadays,

I can get you into Goulburn for a little less than that, but just like Orange, it wont last long as land is in very short supply now and getting pricier by the day. Rent wise, its outperforming Orange. By way of example, Got OC on a Dual occ in Josephs Gate Estate @Goulburn today and tenants for both dwellings are already in place and moving in on Wednesday. 520 house. 320 granny. Just a month ago we were seeing 490 and 300, which was absolutely fantastic. But with these increases my clients will now see a little over 18.5K CF+ annually when we had been anticipating 16K .

 

I'm looking to purchase my first investment property in a growing regional centre in NSW (can't afford Sydney!) and have been looking at Orange. My budget would be 500-600k depending on the property of course, preferably a 600m2 block or larger and something that requires little to no renovations, and would prefer to positively gear it.

@euro73 based on your knowledge of the market in Orange, would you say that given my parameters I could find a great investment or should I be looking elsewhere?

For example, found this property on a huge block, they're asking for around 620k which is a tad higher than I was hoping but it looks pretty great to me - thoughts?
51 Kooronga Avenue, Orange NSW 2800 | Domain

Have been looking at some properties in the northern part of Orange (west of the train tracks) and also a couple of nice properties just off the Escort Way - how do I know if this is a good area?

 

I`m not an expert but this house in orange looks decent and can be considered 4-5 bedrooms....

 

Orange is my favourite regional and it's still a really strong market BUT it has become far more expensive to buy into, and it's therefore much harder to generate strong yields.. rents have been growing strongly as well , but not as fast as prices In order to generate positive cash flow its unlikely you will achieve it by purchasing a single /vanilla dwelling - unless you can make it work as an AirBnb for example . If you truly want stromg CF you need to consider buying a home with adequate access and space to add a granny flat , or you need to buy a Dual Occ. I woiuld suggest that you have probably missed the uplift in Orange , and should look further out - places like Tamworth or Armidale are our next locations for Dual Occs and they are right at the first stages of firing up. But if you really want Orange , focus on finding something established which will allow for a granny flat

 

I found direct flight bris to orange and my colleagues went via sydney ...... job was in barhhurst.

I think millthorpe is nice.

 

Orange has some real potentials, in my view - some quality houses around the CBD are selling for $550k up to the $600k+ mark.

One observation - I notice that there are some newly built houses about 5-8km from the Orange CBD that are quite expensive. I have personally inspected one and thought it looks really good, but doesn’t justify the price premium (the one inspected has an asking price of $900k+ when an older house right in the CBD is selling for way less). Probably a bit like the off the plan vs old unit debate around Sydney.

 

May I ask what the attraction to somewhere like Armidale/Goulburn are? I've always thought there wasn't all that much going on?

Do you deal much with Parkes?

 

There are low vacancy rates and 16K net cash flows going on Actually, Goulburn is better than that as rents just jumped by 30 and 30 .... so we are looking at close to 19K CF+ in Goulburn moving forward

What we have seen time and again is that people underestimate regionals. Regionals cant grow is one of those rusted on myths that people just continue to believe even when the facts say they perform very well . It's been absolutely amazing for our clients.

If you read back through the debates on Orange, when we started doing regional Dual Occ's, the naysayers were all over it. Nobody wants anything but a 4 bedder on a big lot. Nobody will rent a granny flat. Yada yada yada.... All proven wrong, again and again and again and again... Massive uplifts in prices and massive uplifts in rentals in every market we have built; Orange, Bathurst, Dubbo, Goulburn... and now we expect to see the same in Tamworth and Armidale

This isn't hard to understand;
Land is cheap - relative to big cities anyway
Lifestyle is high quality.
Demographics have changed. Sydney and Melbourne and Brisbane aren't the only places in the country where people have less kids and marry far later - not everyone wants a 4 bedder anymore.
Many families cant afford big cities anymore. They can afford a home in these places and they can work from home
Many retirees cant afford sea change anymore . Tree changes are the new sea change

It only requires a relatively small number of people to move to a regional and to either buy or rent , and the land supply and rental supply comes under extreme pressure very quickly. Insert any or all of the points above into that equation, and what pops out is what I predicted would pop out .

I never expect big growth. Credit trends dictate that more than anything. Its fools Gold trying to pretend otherwise. But I always expect really solid, stable, 15,16K type returns. And that's plenty good enough for what we are trying to achieve ; accelerated mortgage reduction and a passive income at retirement for our clients . Anything beyond that is a nice bonus



We are investigating Parkes.... We are considering doing a dozen or so there...I just wish it had a little more than 12,000 population. 15 ,000 + would make us feel a tad more comfy about it ..... 20,000 would seal the deal. Watch this space.

 

Going to Parkes in July for my son's hockey state championship... I think I will have quite a bit of time on my hands.

 

Parkes is going just as strong as Orange. You'll have to decide whether it's better to wait for the cycle to relax or get in before it's too late. Seems to be a pretty massive uplift this cycle.
There are some excellent old houses but it's really really hard to get labour there. The tradies have been booked out for years and so it continues. Wish more tradies would move there!
Don't worry about the population - one of the friendliest and most down to earth in Australia, so when someone leaves, they'll eventually return.
Great place but renos take Ages.
Eh best kept secret. No developers please.

 

And.... they have snow in Orange