Top 10 Regional Areas for Capital Growth

Introduction

At RiskWise Property, our dedicated team continually investigates housing and investment markets to provide relevant news and insights for our clients. Our latest research highlights the top 10 regional areas in Australia poised for significant capital growth. Leading this list is the Mornington Peninsula in Victoria, followed closely by Melbourne’s western suburbs. Through meticulous data analysis, we aim to inform investors about the key factors driving growth in these regions and the opportunities they present.

The Mornington Peninsula: A Capital Growth Leader

The Mornington Peninsula has topped our list, boasting a remarkable 18.4% capital growth for houses over the past year. This region combines natural beauty, lifestyle appeal, and robust economic indicators, making it a prime choice for investors seeking strong returns.

Factors Driving Growth

Doron Peleg, CEO of RiskWise Property, emphasizes the importance of solid auction results, strong population growth, and a healthy economic environment. The region’s growth is fueled by a significant influx of both overseas and interstate migration, contributing to its desirability as a residential area. As economic conditions in Victoria remain strong, the Mornington Peninsula continues to attract attention from buyers and investors alike.

Lifestyle Appeal and Infrastructure

The Mornington Peninsula offers a lifestyle that many seek. Its beautiful beaches, wineries, and recreational activities make it an attractive destination for families and retirees. Additionally, ongoing investments in infrastructure, such as improved transport links and community facilities, enhance its appeal. As the population grows, demand for housing in this area is expected to rise, making it an ideal location for long-term investment.

Sustainable Development and Future Prospects

Future developments in the Mornington Peninsula are set to further bolster its economy. Planned infrastructure projects, such as the expansion of road networks and public transport improvements, will facilitate better connectivity to Melbourne and other regions. These developments not only increase accessibility but also enhance property values. The combination of lifestyle, amenities, and infrastructure makes the Mornington Peninsula a sustainable investment choice.

Melbourne’s Western Suburbs: A Solid Contender

Ranked second, Melbourne’s western suburbs have demonstrated substantial capital growth of 16.9%. This area benefits from its proximity to the city, making it an attractive option for those seeking affordable housing close to urban amenities.

Economic Resilience and Investment Potential

The strength of the Melbourne market is underscored by ongoing population growth and economic stability, with an impressive gross state product growth rate of 3.3%. The demand for housing in these suburbs is expected to remain high, particularly in middle suburban rings where affordability and accessibility converge.

Community and Connectivity

Communities in the western suburbs are thriving, bolstered by local amenities and strong public transport networks. This makes commuting to the city feasible and attractive for residents. Areas like Wyndham and Melton are poised for further increases in property values, presenting excellent opportunities for investors.

Future Development Plans

Local councils in the western suburbs are actively planning new projects aimed at enhancing community services and infrastructure. Investments in parks, schools, and transport facilities are set to attract more residents, thereby increasing property demand. These developments indicate a strong commitment to fostering growth in the region, which will ultimately benefit property investors.

Other Noteworthy Regions

Beyond the Mornington Peninsula and Melbourne’s western suburbs, several other areas have shown promising capital growth potential:

Inner South and North East Melbourne

The Inner South and North East suburbs of Melbourne report capital growth rates of 12.3% and 13.9%, respectively. These regions benefit from well-established amenities, transportation links, and desirable residential environments. Families looking for quality schools and services are drawn to these suburbs, adding to their appeal.

Emerging Markets in NSW and ACT

The ACT (15.6%) and regions within New South Wales, including the Central Coast (12.4%), Southern Highlands, and Shoalhaven (15.4%), have also been recognized for their growth potential. These areas are positioned favorably against the high property prices of Sydney, attracting buyers seeking more affordable options without compromising on lifestyle.

Insights into Hobart’s Performance

While not in the top tier, Hobart was very close to making it onto both lists for houses and units, demonstrating strong performance despite the economic growth in Tasmania being the second lowest in Australia. This indicates a burgeoning demand that could lead to future capital growth, making it a market to watch closely.

The Importance of Economic Fundamentals

According to Mr. Peleg, the ranking of regional areas reflects the economic fundamentals necessary for sustainable growth. High-performing economies dominate the list, while areas in Queensland, Western Australia, and the Northern Territory were notably absent due to their lower economic performance.

Evaluating the Market Landscape

As we move into 2024, the economic landscape is shifting. Stable interest rates are fostering cautious optimism among potential investors. Demand is beginning to outpace supply in undersupplied areas, signaling a ripe environment for growth.

Demographics and Migration Trends

One of the key drivers of property growth in these regions is demographic change. Australia is experiencing significant interstate migration, particularly as people seek more affordable housing options. This trend is likely to continue, further propelling demand in regional markets.

Selection Criteria for Top Regional Areas

Our assessment of the top regional areas was based on five critical criteria to ensure a comprehensive evaluation of their potential:

1. Affordability: Each local government area (LGA) had a median house price below the maximum affordable threshold, enabling first home buyers to enter the market.
2. Property Trends: Areas with a minimum of 20 sales in 2023 and 2024, showing positive median price growth, were prioritized for inclusion.
3. Investment Viability: The chosen LGAs demonstrated rental yields on par with or higher than their capital cities, along with competitive vacancy rates.
4. Project Development: Areas with significant future project development were favored, indicating a positive economic outlook and potential for growth.
5. Unemployment Rates: We ensured that selected areas had unemployment rates at or below the national average of 4.1%, highlighting local job growth and economic stability.

The Top 10 Regional Areas for Capital Growth

Based on our rigorous methodology, the following regional areas stand out as having solid fundamentals for sustainable growth:

• Mackay Regional Council, QLD
• Toowoomba Regional Council, QLD
• Townsville City Council, QLD
• Dubbo Regional Council, NSW
• Tamworth City Council, NSW
• Griffith City Council, NSW
• City of Ballarat, VIC
• City of Greater Shepparton, VIC
• Wodonga City Council, VIC
• City of Burnie, TAS

These regions all feature median house prices below $600,000, offering affordable options for home buyers compared to major metropolitan areas.

In-Depth Look at Selected Areas

Mackay Regional Council: Known for its booming resources sector, Mackay offers promising investment opportunities. Its median house price remains attractive, and ongoing infrastructure projects support future growth.

Toowoomba Regional Council: With a strong agricultural base and growing population, Toowoomba is positioned well for long-term capital appreciation. The city’s strategic location and quality of life make it appealing to both families and investors.

Townsville City Council: Townsville has seen significant infrastructure investments, which are expected to enhance its economic growth. The city’s affordable housing market and low vacancy rates contribute to its attractiveness.

Dubbo Regional Council: As a regional hub, Dubbo benefits from a diverse economy, making it an ideal location for investment. The city’s expanding services and amenities support population growth.

Tamworth City Council: Known for its vibrant cultural scene, Tamworth is also an economic center for the region. Its affordable housing and strong community spirit contribute to its desirability.

Griffith City Council: With a focus on agriculture and viticulture, Griffith is poised for growth. Its affordable housing market and strong rental yields make it an attractive investment destination.

City of Ballarat: This historic city offers a blend of heritage charm and modern amenities, making it a popular choice for families and retirees alike. Its proximity to Melbourne adds to its investment potential.

City of Greater Shepparton: With strong agricultural roots and a growing population, Greater Shepparton is becoming increasingly attractive to investors seeking growth opportunities.

Wodonga City Council: As part of the Albury-Wodonga twin cities, Wodonga offers a strong community vibe and affordability, appealing to first home buyers and investors.

City of Burnie: Burnie has a rich industrial history and is becoming an attractive destination for those looking for affordable housing and lifestyle options in Tasmania.

Current Trends in Home Ownership

The trend toward home ownership is evolving, especially in the context of rising housing prices in metropolitan areas. First home buyers are increasingly looking towards regional areas, drawn by affordability and lifestyle benefits. The number of first home buyers grew by 16.8% in the last quarter and 12.8% in the past year, signaling a shift in buyer sentiment.

Government Initiatives and Support

Government initiatives aimed at supporting first home buyers have also played a significant role in this trend. Programs such as grants and incentives for new builds are helping to ease the financial burden for buyers, further driving demand in regional markets. These initiatives not only stimulate the housing market but also contribute to economic growth in these areas.

Future Outlook: A Time to Act

As we navigate 2024, the regional property market is poised for growth. With cash rates stabilizing and increasing demand, property prices are likely to gain momentum. The time for potential investors to act is now, particularly in the highlighted regions where opportunities for growth are abundant.

Building a Sustainable Portfolio

For investors, building a portfolio in these emerging markets can lead to long-term financial stability. By diversifying investments across different regions, investors can mitigate risks associated with

market fluctuations. The focus on regional areas not only enhances potential returns but also contributes to the broader economy by promoting development and growth.

Navigating the Market: Expert Guidance

Navigating the property market can be complex, especially for first-time buyers. At RiskWise Property, we offer expert guidance to help our clients make informed decisions. Our research and insights are designed to empower investors with the knowledge they need to capitalize on emerging trends and secure their financial futures.

Conclusion

In conclusion, our analysis at RiskWise Property highlights the promising potential of regional areas for capital growth in Australia. The Mornington Peninsula leads the pack, supported by strong economic fundamentals and a thriving residential market. As we look to the future, the combination of stable interest rates and a recovering market presents a unique opportunity for both investors and first home buyers.

Our dedicated team continues to monitor these regional markets closely, providing insights and updates to ensure our clients are well-informed in their investment journeys. As we move into 2024, we encourage potential investors to act promptly, as the window for securing affordable properties in these burgeoning regions is narrowing. With careful planning and informed decision-making, the dream of home ownership and successful investment can become a reality in Australia’s regional markets.

Final Thoughts

The regional markets in Australia are evolving, presenting both challenges and opportunities. While major cities have historically attracted the most attention, our research underscores that regional areas are not only viable but may be the key to sustainable capital growth in the future. As our team at RiskWise Property continues to gather and analyze data, we remain committed to providing our clients with the tools and insights necessary to navigate this dynamic landscape.

Whether you are a first-time home buyer or a seasoned investor, understanding these emerging trends will empower you to make informed decisions that align with your long-term financial goals. The future of property investment is bright, especially in the regions we’ve highlighted, and we look forward to supporting you on your journey to success in the Australian property market.

In summary, the combination of affordability, strong economic fundamentals, and lifestyle appeal in regional areas makes them a compelling choice for investment. The opportunities are abundant, and with the right information and strategy, both new and experienced investors can achieve their property goals. Join us at RiskWise Property as we navigate these exciting market trends and seize the opportunities that lie ahead.