As house prices fall in most capital cities around Australia, a host of regional towns are stepping into the spotlight, offering easy commutes, plenty of open space and the lure of one thing money can’t buy – time. Alex Brooks zeroes in on the areas worth investing in.
When Peita Mages was a film publicist living the high life of premieres, press liaison and pretty clothes in Sydney, her commute was decidedly less glamourous than her job. She had a large mortgage on a three-bedroom California bungalow in the suburbs that required an hour-plus trudge to reach the city each day.
“I had to walk up a huge hill and walk a kilometre from where I parked for the train, get on the train, then change trains. I had to have my sneakers in my handbag,” says the 40-year-old who now lives in the regional town of Orange in NSW, where everything – shops, work, her kids’ schools – is within a five-minute drive of home.
“We used to go to places like the Blue Mountains to relax – commutable little weekend away type places and we’d go, ‘Oh, I wish we could move’ – but our biggest worry was always, what are we going to do? Our jobs don’t translate to these towns,” she says.
After the birth of her first child, Peita ditched her glamourous career to retrain as a school teacher and pursue an escape from capital city living. She has built her dream house on 40-acres of land and has opened her own business, Clever Cookie Academy, tutoring kids and training teachers from a barn-style shed on her property. Peita is not the only city dweller wistfully looking for a more relaxed pace of life in Australia’s regions – her sister soon packed up and sold her Sydney home to join her in Orange. There’s also increasing evidence that young Australians living in overpriced capital cities like Sydney, and to a lesser extent Melbourne, are moving to more affordable regions of Australia, where the lifestyle is good and a mortgage is manageable.
This means regional property – particularly in so-called lifestyle locations which are close enough to capital cities but far enough removed to be affordable – are likely to attract younger, permanent residents that drive regional economic growth. Propertyology managing director Simon Pressley says regional property is Australia’s price growth powerhouse, “The six and a half out of ten Australians who live in capital cities broadly have this perception that capital cities are best for property and nothing ever happens in the regions except bad news – that’s not the case at all,” he says, pointing out that 200,000 jobs created in 2017 and 2018 were outside the Australian capital cities.
ABS Census data shows NSW, SA, WA and NT are the states suffering the greatest population losses while Vic and Queensland receive the greatest population gains.
“The insecurity attached to work and rising house prices and congestion is making it difficult for people to establish security in larger cities so they are moving to regional areas,” says population expert, Dr Lisa Denny, a research fellow at the Institute for the Study of Social Change.
Dr Felicity Picken of the University of Western Sydney says ABS Census data shows younger age groups, particularly those aged 25 to 29, leaving Sydney for other states and regions as housing affordability bites. “People are starting to react to the inconvenience of actually living in the cities,” she says. Longer commute times, rising rents and competition from airbnb landlords who make more money from short term letting – along with increasingly insecure job opportunities – mean clued up younger people are making a move.
“The big cities are not delivering the economic promises that they have in the past. Under employed and unemployed people that are just as likely to move as those with the high end jobs,” Dr Picken says. “Younger people can’t see this situation improving in 10 years’ time. So it’s not just a case of I can’t afford a home now; it’s more that they don’t think they’ll be able to afford one at any stage.”
Sure, house prices in Sydney, Melbourne, Perth, Darwin and Brisbane have fallen in 2019 but Core Logic data shows national house prices are still 18% higher than five years ago. This means regional areas with affordable houses are more attractive than ever.
The Demographic Group managing director Bernard Salt says regional areas “are a remarkably good buy in the market right now, especially in terms of quality of life and connectivity”. High speed internet means whether you live in Ballarat, Gundagai or Bathurst, you can be connected to capital city business and commerce.
“You are no longer tied to a geography by your address like you used to be. People don’t know whether you’re speaking to them from a swish Collins Street office in Melbourne or whether you’re doing something out on a property somewhere. I think that’s opened up lifestyle areas and areas within striking distance of capital cities,” he says.
But while some regions have an increasingly bright property outlook with affordable house and apartment prices, others may not have such golden horizons and can be vulnerable to population declines and economic volatility.
“It’s the very cute lifestyle change communities that are attractive,” says Salt. Character villages with good food and wine and rural scenery are appealing to capital city refugees. “There has to be a caché element to this – Facebook capital is important,” he reiterates.
“I think there is an entire generation of millennials coming out of their hipster apartments and terrace houses in the inner city. There was an anxiety in that generation about leaving home, making a commitment to a job and a commitment to a relationship or a commitment to a mortgage. All of a sudden, when you’re confronted with these issues in very overpriced cities, then regional Australia starts to look good,” Salt says.
University of SA dean of research and innovation Dr Andrew Beer says people’s prospects for better quality of life and new business opportunities become so much greater if they are freed from the burden of high house prices. He says export businesses, tourism and agriculture are in strong demand and are ideally placed for people to buy existing businesses or start something new.
He also says professionals like accountants and physiotherapists are abundant in capital cities, but choosing to work in places like “Albury-Wodonga, Shepparton, Bathurst or Orange is actually incredible with good income potential” and strong future job prospects – along with much more affordable housing.
When Adelaide winemaker David Feldheim and his wife Cynthea had their first baby, the siren call of Cynthea’s northern Tasmanian upbringing in the Tamar Valley lured them to give up capital city living for the cooler, pristine Tasmanian hills that offered better winemaking opportunities away from the heat of Adelaide.
There’s some evidence that the cooler Tasmanian weather is attracting a string of climate change refugees, keen to get away from the hotter summers, increased bushfire risk and prolonged heatwaves. Foreseechange forecaster Charlie Nelson says there is a statistically significant correlation between Tasmania’s net interstate migration and rising temperatures.
Australia’s typical interstate migration patterns involve people selling up in Sydney and Melbourne to move to the warmer (and cheaper) climes of Queensland to retire. Dr Lisa Denny suggests climate change could see that trend dissipate, as hotter and more unpredictable weather influences people to choose cooler areas such as Tasmania.
Fellow Tasmanian Sarah Coleman – who left the rural NSW town of Mudgee for the cooler temperature of Allen’s Rivulet outside Hobart two years ago agrees, saying the cooler weather and higher rainfall of Tasmania is attractive.
“There were so many reasons for moving to Tasmania: lots of wilderness to explore, more culture, different schooling. The heat (of Mudgee) was definitely increasing and was a big factor in us leaving. The rainfall was getting lower and more sporadic,” she says. “We have practically the same amount of animals we had on 40 acres in Mudgee on six acres here in Allen’s Rivulet.”
David Feldheim – who now runs Beautiful Isle Wines – says tourism in Tasmania is booming, along with the construction and food industries. “I know Queenslanders who come to Tasmania on their holidays so they don’t have to wear shorts,” he says. “It’s cool to be cooler.”
REGIONAL HOTSPOT # 1
Where: The Sunshine Coast, Queensland
Distance from Maroochydore to Brisbane: 103km or 1 hour and 30 mins by car
Population: Approx 300,000
The lure: The clean surf beaches, set in the shadow of the Glasshouse Mountains, make this coastal region attractive for lifestyle and business reasons. It’s close to Brisbane, but also has its own airport in Marcoola. The hinterland villages of Montville and Maleny are cooler while the beachside destinations of Maroochydore and Mooloolaba are popular with holiday makers and permanent residents.
Median value houses: $615,077; 5 year growth 28.5%
Median value apartments: $433,756 , 5 year growth 23.2%
Median weekly advertised rent for a house: $495
What $400,000 buys you: The average house price on the Sunshine Coast is driven up by the $2 million-plus beachfront and canal-front homes. Areas like Nambour and Caloundra are the most affordable locations, according to Buderim Mortgage Choice director Kaia Hunter, where you can pick up an unrenovated 10-year-old suburban-style home for between $400,000 and $450,000. An older weatherboard home can be snapped up for under $400,000, as can smaller brick homes with just one bathroom. Older-style units start at less than $250,000, but you need to watch for the sting of strata levies in cheaper units. Hunter says $500,000 to $750,000 will get you a beautiful home either in the hinterland or closer to the beach. “There is lots of new development going on, especially in Maroochydore,” she says, where brand new luxury units can be bought for between $400,000 and $700,000, depending on the ocean view. Older-style townhouses and units are easily snapped up for less than $400,000, with a three-bedroom, two-bathroom townhouse in walking distance of Ocean Street selling for $359,000.
REGIONAL HOTSPOT # 2
Where: Launceston, Tasmania
Distance from Launceston to Hobart: 200km or 2 hour and 30 min by car
The lure: This is Tasmania’s second largest city, set on the banks of the Tamar River (kanamaluka) and offering a range of historic homes in a clean, green city with an airport and a strong local jobs market. The CBD area and the river is undergoing more building, as investors build new accommodation to cater for the tourists visiting the Apple Isle. Launceston has its own airport and is just over one hour’s flight from Melbourne.
Median value houses: $327,094, 5 year growth 32.8%
Median value apartments: $250,562, 5 year growth 18.9%
Median weekly advertised rent for a house: $330
What $400,000 buys you: Launceston is a hilly city, and views of the river are coveted. Historic and well renovated properties are the most sought after, but you can buy a five-minute drive from town for between $300,000 and $400,000. Older Victorian buildings revamped as apartments are popular with investors, with two-bedroom apartments snapped up for less than $325,000. A charming 1920s three-bedroom weatherboard cottage with a new kitchen and bathroom and a prized level backyard in walking distance to the hospital was snapped up for just under $400,000 in May 2019. Brick and stone houses are more sought after – especially older-style Victorian era homes – and you’ll need to budget more than $500,000 for these. Units are the most affordable, with an old 1920s home converted into five separate units selling in the mid-$700,000s.
REGIONAL HOTSPOT # 3
Where: Barossa Valley, South Australia
Distance from Tanunda to Adelaide: 78km or 1 hour by car
Population: Approx 38,000
The lure: This semi-rural wine and grazing region has small towns like Tanunda and Angaston, with easy access to a new highway into Adelaide. It’s a hotspot for tourism, with plenty of wine making and microbreweries, as well as gourmet food operations. The region features a mix of modern and older-style homes and agricultural properties.
Median value houses: $366,788, 5 year growth 18.1%
Median value apartments: $232,411, 5 year growth 23.9%
Median weekly advertised rent for a house: $330
What $400,000 buys you: Nuriootpa has new subdivisions where blocks of land start at $160,000. You’ll get a nice three bedroom home for $400,000 in one of the main towns like Tanunda or Angaston. Smaller villages like Greenock and Bethany are attracting food and wine entrepreneurs and have older properties starting around the $300,000 mark. Agricultural properties range from 20 acres up to 80 acres and are priced according to their growing viability and income. Barossa Real Estate director Peter Fairweather says there are 70-80 local restaurants and the lifestyle is relaxed and rural, with a lot of investment from China, Europe and America to secure viticulture and food growing land.
REGIONAL HOTSPOT # 4
Where: Ballarat, Victoria
Distance from Ballarat to Melbourne: 115km or 1 hour and 30 min by car
Population: Around 110,000
The lure: Home of the Eureka Stockade, this old gold mining town was once the richest place on earth, and is now the third largest city in Victoria after Melbourne and Geelong with a population of around 110,000 people. The city, which has become a popular food destination for travellers, has a train link to Melbourne, which takes an hour and 16 minutes to travel to the capital. There are large employers like Mars and McCain foods, as well as hospitals and a range of private schools.
Median value houses: $404,949, 5 year growth 35.9%
Median value apartments: 285,660, 5 year growth 36.2%
Median weekly advertised rent for a house: $320
What $400,000 buys you: Beautiful period homes close to town and in need of a renovation start around the $300,000 price point. If you’re looking for something that’s ready to move into, that figure sits between $500,000 and $750,000. New blocks of land 10 minutes’ drive from the centre of Ballarat start at $160,000 and brand new three-bedroom brick homes can be purchased for around $400,000. Ballarat hockingstuart director Tim Valpied says his town is being flooded with young families from Melbourne looking for housing affordability and high quality public schools like Clarendon and Ballarat Grammar. Older-style walk-up units, which are more popular with investors than owner occupiers, can be snapped up for less than $200,000.
REGIONAL HOTSPOT # 5
Where: Orange, NSW
Distance from Orange to Sydney: 255km or 3 hours and 40 min by car
Population: Around 38,000
The lure: This historic fruit-growing district is where poet Banjo Patterson was born. Healthcare, mining and government administration are the main local industries, along with agriculture and education. It has tree-lined streets and a range of historic and new homes, as well as nearby acreage and larger agricultural properties.
Median value houses: $366,652, 5 year growth 35%
Median value apartments: $263,879, 5 year growth 17.9%
Median weekly advertised rent for a house: $370
What $400,000 buys you: “You won’t believe what you can get for $400,000 here – beautiful old homes but also modern suburban brick and tile places,” Clever Cookie Academy founder Peita Mages says. Older brick homes built before the 1930s are the prime properties, particularly if they are on more than 1000 sq m and close to town – you can expect to pay more than $600,000 for a renovated character home. Orange has plenty of old weatherboards as well as 1960s and 1970s brick homes in town, which are the most priced around the $450,000 or less, particularly if they are on a block size under 1000 square metres. Small acreage holdings just outside town with four-bedroom homes and swimming pools are also popular, but these start around the $700,000 mark and go up depending on the agricultural potential of the land. Units and villas in town are the most affordable, starting in the mid $200,000, and these are popular with investors.
The Hotspot Checklist
– Towns and regions that are in close proximity to a capital city are more likely to benefit from the infrastructure investments in roads, business and health that spill over from big city planning.
– Look for diverse local economies, and a range of different employers and professional service opportunities, ideally with a growing population base.
– Access to train links and airports is another drawcard.
– Look at the local hospitals, schools, businesses and services.
– Houses are a better long term investment than apartments.
See the story as it appeared in QantasLink Spirit.