There has been no secret over the past couple of years that regional areas have been outperforming metro cities. Most of these markets have done 100% growth over the past 12 months.
What has come out this week is the PropTrack Hottest 100. We’ve picked a few suburbs out of this that we’re going to talk about in more detail, and we’re going to be running through why we think these cities or these areas will perform or might not perform as well.
Affordability in regional property markets
And these are suburbs that you can buy now for less than $800,000, sometimes less than $700,000. A lot of people are averse to regional markets, but you can go through history and see there have been huge profits here.
Most of these markets have done 100% growth over the past 12 months which has outperformed a lot of the cities. We actually spoke about the Hottest 100 about six months ago.
We can go back and fact check how things have performed but this data is not only coming from real estate which is or PropTrack, which is RealEstate.com.au, but it’s coming from property economists, buyers agents and experts in that local market.
Bathurst property market analysis
The first suburb we’ll look at is Bathurst. I’ve actually just come back from Bathurst for the Bathurst six-hour race. I love the pace and the median house price there is $660,000.
Bathurst is split into different little sub-markets. The way we track Bathurst, we’re looking at Bathurst itself, which is this inner city core. And we’ve got East Bathurst, West Bathurst, and Kelso. Kelso is priced at around $880,000 typical price point.
It’s a little bit more expensive, but they’re all different property makeups in there. I was actually researching West Bathurst recently for a client for a granny flat dual occupancy potential. Great little market down there and I agree with Bathurst 100%.
That’s a tick from us in Bathurst.
Investing in Boambee East and Coffs Harbour
Boambee East, up near Coffs Harbour, is a market that we discussed a few months ago. It’s near Sawtell but Sawtell is a much more expensive market, breaking close to the $1.5 million mark now.
But this is obviously catering to more affordable family homes, to the biggest buyer cohort which is owner occupiers, but with the median price less than $800,000, it’s also catering to investors as days on market is low.
Things are selling there pretty well and vendor discounting is quite low as well. We spoke about clearance rates recently. Clearance rates are probably rubbish there but properties are trading in 31 days. You can see the competitiveness.
That’s a green tick from us as well.
Dubbo and Tamworth growth trends
Dubbo and not sure why they’ve grouped these two together but each market there is very different.
Very similar in nature in terms of population growth and infrastructure moving into those markets. Dubbo has done 10% growth in the past 12 months. I purchased 12 months ago for a client. I think it’s very very asset-based.
You need to be making sure that you’re buying bigger homes in those markets because you’re catering to that bigger family cohort and like anywhere you’ve got high socio-economic areas and very low socioeconomic areas in those areas.
It’s important that you don’t just pick one of these regional areas and go ‘That’s where I’m buying’. You need to do a bit more research as to what street, even, you buy.
Dubbo I think has a 6-7% public housing makeup but it’s all congregated in one area. Do your own research on that or you can contact me for that particular advice but you need to be buying the right location in these markets.
Queensland property hotspots: Townsville, Mackay, and Cairns
The next three are up in Queensland. These ones are probably more popular with buyers agents – I know a few that are really pushing areas in Townsville, Mackay and Cairns.
Starting with Townsville. We know that there’s a supply issue up there. Population growth is quite high compared to the supply as well. I think that will keep pushing, but they are building some rather large housing estates up there.
How that’s going to affect prices in the next 5-10 years, we’re not quite sure, but I think you’ll get some short-term growth there.
I personally haven’t researched Mackay or Cairns. I’m not interested in those markets. Townsville, we researched because we did an episode on it six months ago. There’s just a supply issue.
Townsville property supply issues
The fact that people always bang on about investors flooding the market is off the mark. Investors only make up 20 to 30% of the market. Investors don’t drive the market.
As you look at it at a high level, Townsville is overpriced for the core demographic who live there and drive that market. But there is a supply issue which is driving that market forward.
There’s a lot of infrastructure in terms of housing going into that market, but there’s a lot of non-residential infrastructure going into that market as well. Whether that’s going to result in increased population which will obviously keep down that supply issue and drive incomes up as well.
We’ll wait to see how that plays out. I’ve never been a big fan of Mackay and Cairns but Townsville is a watch-and-see. It really depends on the government’s plans to increase supply. Sometimes that doesn’t happen. And sometimes it doesn’t happen for a long time.
Victoria regional markets: Herne Hill and Winter Valley
Next is Victoria which is Herne Hill and Winter Valley. The median price is around $750,000 in Herne Hill and $570,000 in Winter Valley..
They’re both within two hours of Melbourne and they’re about 40% cheaper than the metro equivalent. It’s affordability driving these markets.
I’m not sure if I would have picked these two particular markets. We’ve spoken about Geelong, in particular Corio. If you’re buying in Geelong which is only one hour south of Melbourne CBD, you can still enter that mark of $700,000.
I’m going to put a question mark next to these ones. These have come from the article, but I think there’s definitely better areas in Victoria.
Western Australia market update: South Bunbury
In WA, we’ve got South Bunbury. I disagree with this one. I know that buyers agents were flooding that market 2021, 2022.
It’s had a crazy spike through COVID-19 and then through that whole cheap money period. I think it’s overpriced for the core audience who live in South Bunbury. I disagree with this one completely.