Many first-home buyers whose plans to buy in the city have been dashed by rising prices and interest rates are turning to regional Australia to climb onto the property ladder.
While this isn’t an ideal solution for everyone, first-home buyers should not discount the idea.
Regional centres are growing economically and offer excellent buying opportunities and career prospects.
There are generally two options for regional home ownership: buy and move to a regional city to start a new chapter or, purchase a regional property and then rent it out – remaining back in the city as a renter. This is known as “rentvesting” – renting where you want to live and buying where you can afford it.
If you are thinking of buying a regional property, here are some pros and cons to consider:
Benefits:
- Even though regional properties have increased in value in the past two years, you’ll still get more bang for your buck. Your target properties will be larger and cheaper than their equivalents in the capital cities.
- Most regional areas are witnessing population growth. The Australian Bureau of Statistics forecasts regional populations will double nationally by 2075.
- Regional real estate values have jumped 40% since the pandemic hit our shores. But rising interest rates have cooled the market, and good buying opportunities exist for apartments, houses and acreages.
- A few factors have favoured the regions in recent times. They’ve benefited from an influx of city-dwellers, who’ve made the most of remote working arrangements. That’s been a boost for economic activity and property values. The federal government also has a specific regional first-home buyers grant.
- There are currently strong rental markets in regional Australia, making it possible to subsidise your mortgage repayments with rental income.
Considerations:
- Not every country town or city is booming. So do your due diligence to find an area that best suits your needs. Government investment locally is a good sign. Look for future investments in roads, housing, education and health.
- Check out the main streets. Perhaps nothing is more telling about a local town or city than empty retail spaces. It’s an irrefutable sign of prosperity or struggle. Avoid Struggle Town, even though it will probably have lower property prices.
- Make sure your property is near essential services, such as schools and hospitals. Isolated areas are notoriously tricky for attracting renters and hard to sell when the time comes.