Australia’s top regional suburbs in the past year

Founder and Publisher of the Switzer Report
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Most property investors stick to areas they’re familiar with – the cities in which they live and understand. But for those who live outside Australia’s main city centres and understand country markets or those city dwellers prepared to do their homework and take on some added risk, Australia’s regional areas provide some very attractive opportunities.

Pockets of growth

Take New Auckland, for example. Residex figures for October show that this Queensland suburb on the fringe of the mining port town of Galdstone has experienced an 11.4% jump in house prices in the past year. The average house price is $320,500, enough to get you a two bedroom house on a decent block of land and pull in a rent of $435 a week, with a 7.1% rental yield.

Then there’s South Hedland on the other side of the country in Western Australia. House prices in that suburb have soared by 21% in the past year. The average house price is $642,500, with an average rent of $1,545 a week and a rental yield of 12.5%.

Both these suburbs have benefited from the mining boom and the corresponding increase in demand for housing in these regions. Property expert Margaret Lomas will have more to say on the topic of mining towns in next week’s Switzer Super Report.

But as with any regional area – whether it’s main source of bread and butter is mining, farming, educational or tourism – these areas are much more sensitive to shifts in employment patterns and economic conditions than capital cities and are therefore open to much more volatile price swings.

Those interested in tapping the rural market need to become acquainted with the economic drivers and the associated risks impacting the relevant region. Understanding your market is critical.

The Residex figures

The table below list Australia’s best performing regional suburbs by state and territory, ranked by the capital growth over the past year.

These figures provide a good overview of market trends, but are generally backwards looking. The three-month change in house prices provides a near-term indication of what may be happening in those areas, but at the same time these figures can be volatile and heavily influenced by the number and types of properties sold in that period. Use the near-term figures as a guide to potential changing conditions in a market, but as with any investment, read up on the target market, get out there and speak to people in the region and don’t rush into any purchase.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Anyone should consider the appropriateness of the information in regards to their circumstances.

Also in the Switzer Super Report

Also from this edition