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Regional hubs like Toowoomba, Geelong and NSW’s Central Coast are the affordable future of housing in Australia, new data shows, as some home buyers get priced out of the capitals.
Ten regional local government areas across Queensland, NSW, Victoria and Tasmania were deemed affordable buys in PRD Real Estate’s latest Smart Moves: Regional Edition report, released Thursday.
The report used five criteria: affordability compared to the state capital, property sales and growth, rental yield, the local unemployment rate and planned development in the area.
PRD chief economist Dr Diaswati Mardiasmo said looking beyond price alone was key to ensuring regions were viable for investors and home owners.
“With all of the commercial and infrastructure activity that is about to go into these areas, it is definitely going to turn them into more sustainable, individual, more insulated economic hubs,” she said.
“[They become] not just a regional area that you might go to for a visit, but [somewhere] people can make a proper living.”
The Central Coast, north of Sydney and with houses at almost half the price, made the list of three affordable LGAs in NSW. The region covers a wide selection of coastal suburbs, many with direct access to Sydney via the train or freeway.
“A lot of people are working from home now so it just makes it more attractive to buy up here,” Chad Knight of The Agency Central Coast said.
The area itself has an unemployment rate of 3.7 per cent below the state’s 4 per cent, and homes with views that may command millions in Sydney, are a fraction of the cost.
Knight said there were a number of options for prospective buyers across the region, from investment properties on the Peninsula, covering suburbs like Woy Woy, Patonga and Pearl Beach, through to larger blocks in Lake Haven, Gorokan and Charmhaven in the north.
Rental yields for houses are on par with Sydney, at 2.7 per cent, and slightly higher for units (4.7 per cent), but Knight thought it was only a matter of time until property prices narrowed.
“People aren’t buying with their hearts up there,” Knight said. “They’re buying with their brains. It’s only a matter of time before it takes off.”
Queensland’s Toowoomba, around two hours drive from Brisbane and with a median house price of about $400,000 less than the capital, also made the list.
The area’s median house price more than doubled in the past decade, with a rental yield of 4 per cent, significantly above Brisbane’s 2.9 per cent.
Ray White Highfields agent Brett Richards said the “gateway to the west” is an easy commute to Brisbane, has a new airport and was just two hours away from the Gold Coast.
“We’re one of the biggest inland cities that’s not a capital in Australia,” he said. “The construction here in Toowoomba, like everywhere, is just crazy.”
He thought jobs in the region at the Acland coal mine, Oakey army barracks and the meatworks were a primary reason for the area’s low (3.1 per cent) unemployment, but supporting and service businesses would also offer opportunities as the city grows.
Toowoomba will also host equestrian events for the 2032 Brisbane Olympics, with infrastructure likely to expand as the event approaches.
Known as Victoria’s second city, Geelong was one of three of the state’s featured regions on the list.
Growth in Victorian house prices has slowed in recent years, which means Melbourne is generally more affordable than Sydney (in particular), narrowing the gap between it and regional areas.
Houses were about 37 per cent cheaper in Geelong than Melbourne, with rental yields slightly higher for both houses and units for the former.
“It’s all about lifestyle,” Hayeswinckle East Geelong’s Tiffany Simpson said.
“You’re close to the Surf Coast, the Bellarine … And we have several industries: Deakin University, NDIS, WorkSafe, EnergyAustralia, medical and health centres.”
She said Geelong offered properties across the spectrum with more “bang for your buck”, well below the prices offered in Melbourne.
“I live in Ocean Grove and that’s a 20, 25-minute drive … because I love having the ocean as my backyard,” she said.
“For someone that may not want to have that travel, it could be only 15 minutes. Imagine trying to live 15 minutes from Brighton … It’s going to be a hell of a lot more expensive, isn’t it?”
Mardiasmo said as well as taking the pressure off capital cities, regional areas with job opportunities, infrastructure and affordable housing give buyers a safer buffer for their mortgage.
“You’re committing to less debt,” she said.
“[That means] you can be a bit more financially stable and reassured that you can manage the payment a bit easier, but you also have safety in knowing that we’ve picked places that give good investment returns.”
