There are a number of potential benefits for investors looking at regional areas. Buying an investment property in regional Australia can be an effective strategy if you are seeking combination of positive cashflow properties or capital growth.
For instance, prices are likely to be more affordable for a comparable property in a capital city, thus producing higher rental yields (i.e., the gap between your overall costs, including the mortgage, and the income you receive from renting out your property).
There are also opportunities for significant capital growth if you are buying an investment property in a regional area where there are major infrastructure developments being planned or already underway, as improved services and accessibility (e.g., through better roads or more public transport) generally produce increased demand and higher house prices over the long term.
The top 6 benefits of investing property in regional areas:
More affordable than metro areas
Generally speaking, it is more affordable to buy property in regional areas than capital cities. In addition, dwellings tend to be larger and are situated on bigger blocks of land, giving you more for your money.
However, industry reports suggest that now is the time to get into the market if you are considering buying an investment property in regional Australia. This is because demand in country areas has increased as a result of covid-19, as urban dwellers look for more space than might be available in a comparable city property. As a consequence, there has been a fall in affordability across regional Australia (December 2020), so it makes sense to invest now before regional house prices rise too far.
Opportunities to create positive cash flow
On the whole, rental yields tend to be higher outside of metropolitan areas. This is because the purchase price of properties is generally lower, yet there is always constant (and growing) demand for rental accommodation. According to the January 2021 CoreLogic Hedonic Home Value Index, gross rental yields across all Australian capitals was 3.4%, compared to 4.8% across all regional areas in December 2020.
Continued infrastructure development and investment
Australia’s regions continue to benefit from infrastructure development and investment. This has also contributed to growing demand for regional living. Better transport links, improved access to education, hospital and more retail opportunities all create enhanced demand outside of capital cities and metropolitan areas. As the lifestyle in regional areas continues to offer more amenities to families, the need for rental housing will grow too.
A more comfortable lifestyle
Life outside of our capital cities has great appeal for those who want a change of pace. For families with children, budget investors or retirees looking to take things easier, living in a regional area can be a very attractive alternative. The draw of easy access to unsplit countryside, a slower pace of living and a healthier lifestyle mean that there is always demand for dwellings in locations other than big cities.
Thriving economies and communities
Some of Australia’s most vibrant economies and communities are located in regions outside of major cities. Whether it’s business or agriculture, tourism or food, there are thriving communities all around the country that offer amenities and lifestyle beyond that you will find in urban areas.
In locations where these or similar industries are situated, you may be surprised at how desirable regional areas have become, providing numerous opportunities for both positive cash flow and capital growth through buying investment property.
As the population of Australia continues to grow, there is naturally going to be an increased demand for housing. And while capital cities will continue to be where there is the greatest need for expanded capacity, regional areas too can expect to see population growth, accompanied by further demand for all types of accommodation.
This is because regional cities in Australia have come to play an important part in the country’s economy, increasingly so as more people have come to understand that most of these fast-growing cities are no longer simply focused on a single industry (e.g., mining or manufacturing), but instead offer a diverse range of employment opportunities and a wide variety of housing styles
In fact, the latest figures from the ABS (September 2020) show that due to internal migration (i.e., people moving within Australia), capital cities lost more people to regional areas than at any other comparable period on record. Lifestyle factors are thought to have played a big part in this shift, as have cost of living increases and the price of housing in capital cities. Therefore, if this trend continues regional Australia looks set to offer an ever-increasing range of opportunities for anyone considering buying an investment property or the house to live in with banks continuing to offer the low interest rate.
Get in Touch to Find Out More About Investing in Regional Areas
High Income Property can work with you to devise an effective strategy for making a property investment, based on your financial goals and circumstances.