Buying property in any major Australian city is a big challenge and it’s easy to see why. The median house price across our capital cities is $829,3901 and the median in Sydney is $1,120,8362, as of 2022.
Regional centres on the other hand, can present some relative bargains, with the median price in these areas being $597,0743. Purchasing a home or investment in a regional area could be a more accessible way of getting on the property ladder, but it’s important that you do your homework first.
To get you started, we’ve put together a straightforward list of six things you need to consider before buying regional property:
1. Consider commuting and driving distance
If you’re looking to buy away from your current home, it’s important to consider the distance you’ll have to travel to get to work or see family and friends. The further you are away from family, the less quality time you may have to spend with them, and the longer your commute, the less time you’ll have for sleep, exercise and relaxation before and after work.
It’s definitely a good idea to jump on Google Maps and check commute times to work and other places you regularly visit when planning which regional areas may be a good place to buy. Make sure you do this at peak times so that you’re taking commuter traffic into account and set a maximum time allocation that you’re prepared to put up with for your new commute.
2. Work flexibly, or is it time for a new job?
If you’re facing a long commute and your work/home balance is at risk, it’s worth having a conversation with your current employer to see what flexible working arrangements are on offer. We’ve all had to adapt to a new way of working since COVID-19 and many organisations are supporting their employees working remotely – either on a full-time or part-time basis.
If your employer or job doesn’t allow for that kind of flexibility, you may have to consider finding a new job closer to the home you’re looking to buy. When considering moving to a regional area, it’s important to research the local job market to understand the employment situation.
Because of the nature of regional economies, many regional centres won’t offer the same employment opportunities as larger cities. This is particularly true when it comes to jobs in professional services industries such as finance, advertising and technology - many of which are concentrated in capital cities.
However, there are regional areas that do have industries that thrive, for example viniculture, hospitality, health and fitness, and mining and resources are some of the key employers that you may consider looking into.
3. Be pragmatic when it comes to affordability
For those who’ve been living in capital cities where multi-million-dollar homes are the norm, property prices in regional centres can seem incredibly low. However, it’s important to be pragmatic about these prices.
Just because a property is cheap, that doesn’t mean it’s necessarily a good buy. It’s important to look past price and instead consider value and what those prices might be in the future. It’s also important to factor in population growth, employment and plans for infrastructure, development and housing in the area. Instead of buying something that’s merely cheap, consider purchasing a property that’s likely to increase in value and help you build wealth.
4. Inspect the property and spend time in the area
When you’re buying away from home, it’s more important than ever to make sure you know as much as possible about the property you’re considering and its surrounding area. Here are a few things you should consider doing:
- Make sure you attend a viewing and listen for noisy neighbours, road noise and sounds from nearby businesses.
- Get a building inspection to make sure you know exactly what you’re buying.
- Check out the neighbourhood and think about whether it’s somewhere you might like to live. Can you see yourself spending a lot more time here? Then it could be the place for you.
- A thorough Google search to uncover news articles, find out about schools and great businesses nearby and other interesting information about the city, town or suburb.
- Talk to someone who already lives in the area to get a feel for the place.
- Go grab a coffee at the local cafe and talk to the locals about what it’s like to live in this neighbourhood.
For more tips on checking out a place before you buy read our blog here.
5. Will it give you the lifestyle you’re after?
Before you move to a regional town, think about the lifestyle you want to lead and whether this location will fit your needs. If you’re a fan of fine dining, or the theatre, there may be some limitations, but you may also be surprised about the amenities in your chosen area. Whether it’s school for the kids, cinemas for lovers of film, a library for book worms, public transport for commuting or airports for travel.
Take a close look at the amenities available in the local area and consider whether they’re likely to meet your needs and enable the lifestyle that you want.
6. Get pre-approval first
Whenever you buy property, it’s a good idea to contact your bank a few months in advance to arrange pre-approval. This is an indication that they’ll lend you a certain amount of money to purchase a home.
7. Thinking of investing instead?
Getting into the regional property market can be a good option if you’re looking to purchase an investment property. Many young families often want to live in an affordable area where rentals are available, so pivoting towards a regional investment property could be a good option.
For long-term capital growth, it’s generally a good idea to review the current areas you’re looking to invest and take note of the available infrastructure and work opportunities4.
It’s also generally a good idea to ensure that the area that you’re looking to buy doesn’t already have too many investors. A good rule of thumb can be to look for locations where there’s a good proportion of property owners vs. renters5.
With areas where 70% or more are investment properties, you might want to take the time to speak with leasing agents around the area to see how quickly rental properties are leased so you have a general idea of the property demand6.
According to PropTrack’s Rental Report of March 2022 quarter, the need for rental properties has remained elevated in regional areas, with rent increasing by 10.3% year-on-year7. With the supply of rental properties decreasing, the level of competition for rentals in regional markets remains strong8.
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The information on this page is of a general nature and is not intended to be a substitute for personal advice. This information has been produced without taking into account your personal financial circumstances, objectives or needs. You should consider the appropriateness of the information to your financial situation and seek personal advice before acting on any of this information. Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305.
Published July 2022