Will Regionals Outperform?

Discussion in 'Property Market Economics' started by Boss, 3rd Apr, 2018.

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  1. Beelzebub

    Beelzebub Well-Known Member

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    It's not just affordability that is driving the exodus to regional areas, it is also amenity. The large regionals offer all the services that Melbourne does, but with a five minute drive to work... Unless you're stuck commuting to Melbourne, but for most who move to the regionals they intend to find work locally at some point.

    And yes, you could buy two properties in Ballarat at the moment for $500, but I'd get in quick.

    Also, as far as choosing between Geelong and Ballarat, I'd say it is a much of a muchness. Overall I'd tip Geelong to outpace Ballarat for overall growth; but, one thing to consider is your price point. $500k might get you a decent character house, with land component, in a blue chip Ballarat suburb like Soldiers Hill.
     
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  2. magyar

    magyar Well-Known Member

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  3. strongy1986

    strongy1986 Well-Known Member

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    not too good to be true just a good return that matches the risk
    small regional returns have been creeping up quietly in the past 2 years and I expect them to keep going up with the changes in borrowing power/ restrictions
    it' a good time to be cashed up and of a free mind
     
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  4. NWHT

    NWHT Well-Known Member

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    All dependant on your risk profile. It's a very small regional town - what is employment and attraction factors? What happens if all of a sudden 3x units become available? Have you spoken to the agent about how long they be on market before being rented again.

    Yield may be alright but I don't feel you'd gain much capital growth from the site, look into historical data and see though.
     
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  5. strongy1986

    strongy1986 Well-Known Member

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    capital growth will most likely be tied to rental yield if buying a unit block in a small town.
     
  6. skater

    skater Well-Known Member

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    I'd look closely at what you can do with that land. If you do the subdivision, how hard will it be to sell it off. What sort of prices would it command, and if it's financially viable to do it. You could end up with a nice little earner on a normal size block with free title, after disposing of the land, which, to me anyway, sounds like a nice income play......or you could end up buying a lemon.

    A lot more DD is required.
     
  7. Xiao Hui

    Xiao Hui Well-Known Member

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    维州Ballarat – 第二波的淘金热

    Above is a Chinese edition of Domain. In it, it singled out Ballarat as the city to watch for investment in real estate and also downplayed the potential of Melbourne. At the same time, it also singled out Geelong and Bendigo as the other cities worthy of investment.

    While the above report doesn't come as any surprise to most of us, it is a rarity for Chinese publications as historically, they are very Melbourne centric. So this departure from Melbourne is very telling of something.

    If we take cue from this, it could be the start in the shift of Chinese interest into regional cities. If this happens, it will give greater weight to the expected boom in real estate here, the extent of which cities like Ballarat and perhaps Bendigo might have never seen before..
     
    Last edited: 17th Apr, 2018
  8. d_walsh

    d_walsh Well-Known Member

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  9. David Shih

    David Shih Mortgage Broker Business Member

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    Spot on.

    With a vacancy rate at 4.1% + regional + 23 properties available on re.com.au for rent, I'm more concerned whoever is looking at the surface value is gonna have a big headache in renting the 3 x places out.

    Not to mention as soon as maintenance issue hits, such as replacing aircon or hot water system, then the hard earned profit is gone.
     
  10. Boss

    Boss Well-Known Member

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    I read with interest that the ABS recently reported that 18,000 people left Sydney in 2018 and today RPData again confirmed that the regionals continue to outperform the capitals.

    Still, with millions of Baby Boomers retiring and APRA reducing borrowing capacity I guess the above should not come as a surprise...
     
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  11. Toon

    Toon Well-Known Member

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    "While house prices in Melbourne ticked up by just 0.1 per cent in the March quarter and 8.8 per cent for the year, regional towns and suburbs out-performed some of Melbourne’s most sought suburbs with growth up to nearly 34 per cent in the year to February."

    The regional areas of Victoria with the best house price growth
     
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  12. strongy1986

    strongy1986 Well-Known Member

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    yep it' a predictable flow on effect which is ignored by the majority on this forum for whatever reason.
    It' all good that people made good money in Werribee , hoppers, cranbourne etc but there's no point flogging a dead horse for a 10% upside
    I am surprised in the short time frame in which the growth has occurred in these small towns. This is a very phillip island specific observation but land prices have pretty much doubled in less than 12 months and it appears there's plenty of other towns seeing the same growth
    it will be interesting to see how far the growth spreads as there' still plenty of places in Vic that are the same price as they were 15 years ago.
     
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  13. Brendon

    Brendon Well-Known Member

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    100% agree with you re Phillip Island, prices have gone crazy the last 12 months! I don't know what the official stats say but my places down there have moved 20-30% in the last 12-18 months.

    What other areas are you referring to that haven't changed in 15 years?
     
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  14. Boss

    Boss Well-Known Member

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  15. Fargo

    Fargo Well-Known Member

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    Wow , that would mean a huge influx of chinese. Once 30% of Ballarats population was chinese and 20% of Bendigos population was chinese.
     
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  16. Xiao Hui

    Xiao Hui Well-Known Member

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    I do not think the Chinese will flux Ballarat or Bendigo. Whilst 150 years ago these Chinese came as poor labourers, the Chinese today come over to Australia mostly as skilled professions, business people or investors. The great majority will still want to stay in the capital cities where they can have everything they want.

    If the Chinese indeed are to buy in Ballarat, this will be more of speculative nature. I do not think they have any intention to reside here. Same goes for Geelong and Bendigo if it happens.
     
  17. hieund85

    hieund85 Well-Known Member

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    I do not think you can group Geelong together with Bendigo and Ballarat. Geelong has one significant advantage that the other two cannot offer which is the beaches. I know quite a lot of Asian people (not just Chinese) bought in Geelong to have better lifestyle while still within reasonable commuting time to Melbourne. Deakin uni campus in Geelong also attracts quite a number of foreign students.
     
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  18. Boss

    Boss Well-Known Member

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    Hervey Bay is definitely continuing to pick up; more properties selling readily for above 400K.

    Conversely, both the Gold Coast and Sunshine Coast seem to be slowing though?

    Perhaps the above is occurring because Hervey Bay was subdued for quite a while and is coming off a lower base as opposed to both the Gold Coast and Sunshine Coast that have been comparatively strong over the last few years?

    So Seachangers (those selling in the capitals and banking the difference) have been priced out of the Gold Coast and Sunshine Coast and investors are liking Hervey Bay due to the fact that it's in the early stages of its growth cycle?
     
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  19. lightbulbmoment

    lightbulbmoment Well-Known Member

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    Newcastle regional is cooked black, market is fuelled by sydney investors coming up the freeway and losing there shirts.

    To buy there now or the last year u are paying roughly 80percent more then what u could of in 2012
     
  20. Boss

    Boss Well-Known Member

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    Yes Newcastle has run pretty hard over the last 5 years but with the unprecedented level of development occurring its hard to see it declining over the next few years.

    So all things considered I expect Newcastle to outperform Sydney over the next few years...although with Sydney on a definite downward slope I realize that wouldn't be hard to do.