Blog post courtesy of PRD.
The Australian property market is made up of many ‘micro markets’, each performing at its own individual pace dependent upon demographics, population growth, economic structure and fundamentals, and Local/State Government policies. Regional property markets tend to be more resilient compared to their capital city counterparts due to being slightly more insulated from economic shocks, and many Local/State Governments prioritising regional areas growth over the past five years.
For first home buyers and investors, finding an affordable option in capital cities can be challenging. This is especially true as the state average loan only makes up between 51.9% (Sydney) to 76.1% (Brisbane) of the median house price in the capital cities.
The PRD Resilient Regional Areas report highlights affordable regional areas in QLD, VIC, NSW and Tasmania TAS. These areas not only have median price affordability, but also provide strong indicators for property investment, local employment growth, and a sustainable economic future.
5 selection criteria were used to select the top 12 regional areas:
Affordability – the Local Government Area (LGA) has a median price below the maximum affordable property sale price (average state loan + 20% deposit).
Property trends – to ensure statistical reliability, the LGA will have 20 transactions or more in 2018 and 2019, with positive price growth within that time period.
Investment – to ensure solid investment opportunities, the LGA will have an on-par or higher rental yield than its capital city, as well as an on-par or lower vacancy rate compared to its capital city.
Project development – the LGA will have a high estimated value of future project development, with a higher concentration of commercial and infrastructure projects to ensure a positive economic outlook.
Unemployment rate – as of the December Quarter 2019, the LGA will have an on-par or lower unemployment rate than the state average, to ensure there is local job growth.
Based on the above methodology and selection criteria, the following 12 regional locations were deemed to be ‘resilient regions’ with solid fundamentals for sustainable future growth.
1. Douglas Shire (QLD)
2. Cairns Region (QLD)
3. Tablelands Region (QLD)
4. Livingstone Shire (QLD)
5. Upper Hunter Shire (NSW)
6. Singleton Area (NSW)
7. Greater Hume Region (NSW)
8. Greater Bendigo City (VIC)
9. Moyne Shire (VIC)
10. Bass Coast Shire (VIC)
11. South Gippsland Shire (VIC)
12. Kentish Municipality (TAS)
View original article here.