Top 10 Regional hot spots are all local
Regional property markets have outperformed some of the traditional core metropolitan markets in recent years, with many doubling in price over the past five years.
At a presentation on regional property in Sydney yesterday, Colliers International’s research director, Tim Lawless, named Townsville, Hervey Bay and Ballina/Lennox Head as the nation’s top regional markets.
However, he warned investors about the risks involved in regional markets that depend on a sole industry. Towns such as Moranbah, Emerald and Dysart in Queensland’s Bowen Basin have shown growth in median house prices between 26 per cent and 68 per cent in the past five years, but are open risk because of their complete dependence on coal.
Herron Todd White’s property valuers director in Newcastle, Nick Payne, said there were large returns in areas such as Singleton and Muswellbrook that were directly coal-related, but “with that comes greater risk”.
“If there was to be a downturn in the coal market, there could be a corresponding downturn of commercial property and residential values would also be substantially reduced,” he said.
In contrast, regions such as Townsville and Darwin are reaping benefits of diversity.
“Darwin not only has a $2.8 billion plus mining industry, but a $1.5 billion tourism industry, a significant military base and port facilities,” Mr Lawless said.
Drawing on research by recently amalgamated PRDnationwide, Mr Lawless named Townsville, which has experienced an 18.5 per cent median house price growth a year in the past five years as the top regional hot spot because of its diverse economic base and strong population growth.
The town, which has an army base and a university, is expected to get a further 800 military personnel by 2010 with 700 support staff.
Colliers International director of research in Queensland Colin Dwyer said Townsville was good value because its residential vacancy rate of 2 per cent was under pressure from a 3 per cent population growth rate as well as holding some of the best water supplies in the country.
Second on Colliers International’s top 10 was the Queensland coastal town of Hervey Bay where the median house price has more than doubled in the past five years.
“It’s the affordable coastal property which is attracting strong population growth particularly from the over-50 empty nester market,” Mr Lawless said.
Ballina and Lennox Head in northern NSW came in third after benefiting from new roads to the Gold Coast, Darwin, in the Northern Territory, came in fourth with its similar characteristics to Townsville.
The Bass Coast in Victoria was next with areas such as Phillip Island and San Remo becoming very popular with sea-changers.
Also in Victoria, East Gippsland beaches and lake areas are regarded as providing some of the most affordable waterside living and are becoming popular with holiday home buyers.
Number seven was Queensland’s Yeppoon. “The Capricorn Coast is still providing relatively affordable coastal property and other areas surrounding Yeppoon such as Emu Park are recording strong price growth,” Mr Lawless said.
Coffs Harbour was eighth with an average 16 per cent growth rate in house prices over the past five years.
Wollongong and Shoalhaven came in at nine after experiencing high demand for houses and land from first home-buyers an young families.
Shoalhaven has recorded the highest number of land sales in NSW over the past five years.
At 10 was the Tweed Coast, which has benefited from the ripple of development spreading along the southern coastline of the Gold Coast and northern NSW.
Key Points
- Townsville, Hervey Bay and Ballina/Lennox Head top Australia’s regional property markets.
- Diversified centres such as Darwin are the safest property investments.
By Matthew Cranston
The Australian Financial Review
Thursday 20th September 2007