New investors looking to take their share of the real estate market while the weather is warm may want to consider breaking into locations with an affordable entry point and strong economic conditions.
Grant Foley Property Director Grant Foley said property investors are starting to look away from Sydney and Melbourne, where entry-level home prices are already above $1 million.
“Two-thirds of our population live outside of these two capital cities, where purchase prices are more affordable and often in places where there is excellent potential for value appreciation in the medium to long term,” said Mr. Foley.
Mr. Foley identified five locations where novice investors can start or expand their portfolio.
These include Moreton Bay, Ballarat, Newcastle, Adelaide and Perth, all of which have built detached houses under $650,000, a perfect price for emerging investors.
However, keep in mind that according to the latest data from Real Estate Investar, Perth’s latest median home price is $775,000.
Rise of regional locations
Mr Foley said the Moreton Bay area experienced ripple growth from the outskirts of Brisbane City Council as first-time homebuyers sought more affordable housing.
It’s no surprise that a Brisbane location is Mr Foley’s first choice.
In fact, a recent survey by the Property Investment Professionals of Australia (PIPA) found that three in five investors think Queensland and Brisbane have the best investment prospects during the year.
“The region is also benefiting from strong interstate migration, as well as numerous major infrastructure projects, including transport hubs and a new university – while gentrification of the Redcliffe Peninsula is also underway,” said Mr Foley.
Ballarat is also a top spot for potential investors.
The regional cities’ selling point is the close proximity to the Melbourne CBD – just 1.5 hours away.
“Increasingly, investors are recognizing the potential of large regional locations such as Ballarat, which have different economies and are located within an hour or two of a metropolitan area,” said Mr Foley.
For those looking for a place that can be considered an alternative to Sydney, Newcastle is the way to go.
Mr Foley said Newcastle has always been a destination for homebuyers and investors looking to take advantage of New South Wales’ hot markets.
“Newcastle has reinvented itself from a former steel town into a lifestyle location with great beaches, healthcare and education jobs, as well as being within commuting distance of Sydney for those working a day or two a week in the Harbor City, ” he said.
Capitals hold out
Of the capitals, Mr Foley identified Adelaide and Perth as the only two worth considering for new investors.
Mr Foley believes Adelaide is a viable place due to its sustainability over the years.
Investors who find comfort in security should consider entering the Adelaide housing market as it is not necessarily experiencing booms or busts.
“The purchase price for a home in the City of Churches remains affordable for both buyers and investors, including potential purchases in the investment-grade mid-ring, which is not an option in most other capital cities,” he said.
Perth also seems to hold up. Before the pandemic, Mr. Foley said not much was happening in the city.
“There was a time when the average house price in Perth was on par with Sydney, which most people have forgotten,” he said.
“Prices peaked in 2014, but there are signs of future price growth in Perth with the possibility of still getting detached homes there for less than $650,000.”
Photo by Kindel Media of Pexels
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