With rental yields (income) of 5 percent readily available across large parts of Australia and interest rates (expenses) now below 3 percent, the annual cost to hold an investment property is neutralised. Get in the game and enjoy the capital growth ride. But before you do, here is some food for thought.
- Australia’s total supply of properties listed for sale at the end of January 2021 is an all-time record low and a whopping 23 percent lower than 4-years earlier.
- Property investors are creatures of habit and therefore almost always completely overlook the best-performed property markets of the future. Cast your mind back 5-years ago and ponder where the majority of people would have invested. For the record, Hobart (55 percent capital growth) and Canberra (29 percent) were the best capital cities, while Sydney (13 percent) and Brisbane (14 percent) were underwhelming. A long list of regional standouts that performed better than 7 out of 8 capital cities include, but are not limited to, Ballarat, Bega, Berri, Burnie, Byron, Coffs Harbour, Geelong, Kempsey, Kiama, Launceston, Mildura, Newcastle, Noosa, Orange, Seymour, Shoalhaven, Strathbogie, Torquay and Warragul.
- Over the 12-months ending February 2021, the 8x combined capital cities had an increase in job vacancies of just 2 percent, whereas the combined regional locations had an increase of 65 percent.
- Sydney’s population from internal migration declined by 150,000 people over the 5-years ending September 2020. That’s equivalent to an entire city the size of Cairns or Darwin.
- Despite the COVID-19 interruption, double-digit capital growth was produced in the 2020 calendar year in locations such as Ballina, Bendigo, Bowral, Burnie, Byron, Davenport, East Gippsland, Forbes, Grafton, Karratha, Kiama, Kineton, Launceston, Lismore, Mildura, Moranbah, Noosa, Orange, Parkes, Port Hedland, Swan Hill, Traralgon, Wangaratta, and Warrnambool.
- In just 9-months to September 2020, Melbourne lost 18,000 people (net) to internal migration.
- 60 percent of Australia’s population reside in circa 200 regional locations and 6x capital cities (exc Sydney-Melbourne). Of the 71,000 dwellings advertised for rent in Australia at the end of January, only 28 percent are in these locations. In other words, we are at the early stages of Australia’s biggest ever rent boom.
- Compared to 2-years ago, Australia’s total volume of residential real estate buyers had increased by 10 percent or more in locations such as Airlie Beach, Albany, Albury, Armidale, Ballina, Beaudesert, Bundaberg, Busselton, Esperance, Gatton, Geraldton, Gladstone, Gympie, Mackay, Mount Isa, Mount Gambier, Muswellbrook, Noosa, Rockhampton, Shepparton, Tamworth, Townsville, Victor Harbour, Wagga and Yeppoon.
- With a population of 244,000 people, Australia’s 11th largest city (Hobart) only had 175 dwellings advertised for rent at the start of 2021.
- Only 4.6 percent of Australians catch a train to work. Do not be fooled into thinking that a train line is a real estate growth driver.
- In four (4) different states, Propertyology’s buyer’s agents are currently helping everyday Aussies invest in ten (10) strategically chosen growth cities. The cost of a typical detached house in a central part of town ranges from $380,000 to $600,000.
Here’s a recent example of our work for a client.
Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.