Look past the Sydney obsession to regional NSW

Posted on 7/05/2015  

While the media has been indulging its obsession with Sydney real estate, other parts of New South Wales have been delivering value to property owners but largely going ignored.

The regions generally are overlooked by analysts, journalists and investors - and that means the best opportunities to buy affordably, while getting superior rental returns and great prospects for future capital gains, are being missed.

Economists and journalists think Sydney’s over the top with 14-15% annual growth in median house prices, but the City of Gosford on the Central Coast is out-performing its big brother. 

Most of the Gosford suburbs have delivered median house price growth between 15% and 20% in the past 12 months and some of the apartment markets are up by 20%-plus.

Kariong’s median house price has risen 19% and so has Wyoming’s. North Gosford is up 17%, Narara 18% and East Gosford 17%.

Terrigal and Wamberal have risen 15% and Umina Beach is up 16%.

I hesitate to place too much emphasis on median price data for apartments markets, because they are highly susceptible to aberrations. The marketing of an up-market new project can create an astronomical rise, which is deceptive - it doesn’t mean values are rising to that degree. Ettalong Beach in the City of Gosford provides a current example, with its median price up 83% in the past 12 months. 

A little less crazy, but still major, is the 28% annual rise in the median unit price for Avoca Beach and the 25% increase for Umina Beach. The suburb of Gosford has recorded a 16% rise in its median unit price.

All of this has come on the back of significant rises in sales activity which Hotspotting has been tracking for the past 2-3 years. A dozen suburbs in the City of Gosford still have rising trajectories in terms of sales volumes, so the price growth isn’t over, but the best time to buy there has well and truly passed.

There are many other upwardly-mobile regional markets in the state. The City of Wyong is another big improver – I count eight suburbs with rising markets and another 10 with consistent sales levels.

The City of Newcastle and neighbouring municipalities like Lake Macquarie and Port Stephens are all going well. Port Stephens is showing signs of life after a decade of poor performance.

The Hunter Valley, which has been weighed down by over-supply for the past 2-3 years, looks to be recovering. The municipality of Maitland in particular is starting to produce growth markets and so too is Cessnock.

Port Macquarie, another coastal market which has shown little growth over 10 years, is now pumping. It would rank in a national top 10 for consistently strong sales levels over the past couple of years – dwelling sales in the past seven consecutive quarters have been 358, 378, 388, 369, 335, 360 and 390. It’s amazing what some serious spending on infrastructure can do to a property market.

The Blue Mountains has plenty of growth suburbs and south of Sydney there’s momentum in a number of municipalities, including Wollongong, Shellharbour, Kiama and Shoalhaven.

Further afield in the state, Dubbo continues to be one of the strongest regional economies and property markets in the nation, and there is plenty of life also in Goulburn, Orange, Tamworth, Wagga Wagga, Albury and Coffs Harbour.

In the far north at the Queensland border, the Tweed area is going well.

There is no shortage of choices for Sydney-centric investors unhappy with the competition and the prices in the big city. You can buy well and achieve stellar growth by shaking loose from that Sydney obsession and broadening your horizons, without having to travel too far.

 

Terry Ryder is the founder of hotspotting.com.au

hotspotting@gmail.com

twitter.com/hotspotting


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