Real life young regional first time buyers: Could you do it?

Living regionally isn’t something that every first time buyer is able to accomplish. There are, of course, some things tying people to the capital cities across Australia.

In saying that, for those willing or able to take the plunge into regional property ownership, there are a number of opportunities further out of the city centres that come with a cheaper price tag, or higher rental yields if you’re intending to invest.

Often, when growth has surged in the capitals, regional areas are yet to catch up. This can provide opportunities for those who just saw their desired property soar past them in value.

There are also regional relocation grants potentially on offer. For instance, in New South Wales, a $7,000 has been available for some time (this closes on 30^th September), provided certain criteria are met, And there are often grants for skilled workers willing to relocate to a regional area.

We’ve outlined a select few of the numerous pros and cons that exist to choosing a regional location to live in for first home buyers and new investors.

What’s worth a note is that, for this particular article, ‘mining towns’ are not considered ‘regional towns’ – even while many of them are regionally located. Due to their riskier nature, observer Pete Wargent has called them “insane” as an investment. For those still keen on the idea, then you might want to read Simon Pressley’s five tips for making the process a bit more successful.

Resort or tourist towns are also potentially under this banner of being ‘unusual’ regional areas that offer one major driver and little protection if that industry should drop.

Here are the pros and cons to start thinking about.

For home buyers:

PROS

• Cheaper entry points
  
  
• “Tree change” lifestyle
  
  
• Extra government incentives may be available

CONS

• Volatility (due to smaller populations, and single industry towns can suffer quick downturns)
  
  
• Infrastructure and loss of busy city lifestyle doesn’t suit everyone
  
  
• Getting employment can be tricky

For investors:

PROS

• Cheaper entry points
  
  
• Often higher yields
  
  
• For those with investments or a home in a city, it can offer some diversification for the portfolio
  
  
• May be less competition to purchase in

 CONS

• Volatility (due to smaller populations, and single industry towns can suffer quick downturns)
  
  
• Can be a smaller tenant pool
  
  
• Decent property management in some areas can be a challenge
  
  
• Infrastructure isn’t always as forthcoming
  
  
• The same supply restrictions seen in many capitals are not as evident
  
  
• Can be hard to renovate/repair a property yourself if it’s not located near you
  
  
• The same lack of competition when buying in may mean that it takes longer to sell

Regardless of whether you’re buying solely as a home, or as an investment, it’s worthwhile considering market fluctuations and the volatility of some areas – particularly smaller markets.

Angus Raine, from Raine & Horne, previously provided these three things to look out for when purchasing in a regional area:

1. Robust economies
   
   
2. Strong employment prospects
   
   
3. Population growth

With these points in mind, it’s worth noting that many first time buyers have been taking the plunge into regional properties.

See over page for Q&As with two home buyers who have done the regional shift

It’s all well and good talking about moving regionally – but who's actually done it?

Here are two examples of young first time buyers who have purchased regional property.

These New South Wales based home buyers all moved to an "Evocity", a joint initiative between the state's regional cities: Albury, Armidale, Bathurst, Dubbo, Orange, Tamworth and Wagga Wagga.

Name: Matilda Julian

Age: 29

Employment: Self-employed solicitor

Salary: $50,000 - $60,000 per annum

House, Geurie, Dubbo, NSW

Year purchased: 2009

Number of bedrooms, bathrooms, garaging and any other descriptor details: 2 bedrooms, garage

Cost: $250,000

Deposit:  $50,000 deposit

Why did you choose to buy in a regional area?

I relocated from Sydney to Dubbo after I graduated from University to start my career. I had also saved up some money and could afford to buy a beautiful house out here on my own.

Why did you want to buy here?

I have always been very a homely person, so I like to do things around the house like gardening and raising chickens. Therefore I wanted a property I could invest in for the long term, and within 6 months of moving to Dubbo I bought my own home.

Have you lived in a regional area before?

I grew up in Bilpin in the Blue Mountains, so I was used to open spaces.

How have you found living in the area?

I have found that community networking is strong in regional areas. In times when I have been out of work, my strong community contacts have allowed me to easily and quickly find employment. Due of the low cost of living and renting commercial areas, it is also (and in my experience) extremely viable to start small businesses in regional areas, without the risk associated in more metropolitan areas like Sydney.

How did you hear about the area and properties?

The local paper has a Domain section each week. I was browsing the section and saw the picture of the house I bought and still live in - It was something like love at first sight!

Has this been a significant lifestyle shift for you?

Yes, I now live on three acres of land, with space to have a dog, chooks and a vegetable garden. When I lived in Ashfield I didn’t know my neighbours and I couldn’t mentally bring myself to maintain the garden because of limited time I had and I didn’t know how long I would live there.

How long do you see yourself living here for?

I could stay here and be happy. I am open to moving, but now it would have to be for a significant reason, such as falling in love. But the idea of never moving again is a nice one.

Name: Marilyn and Tim Stebbings

Age: 34 and 39

Employment: self-employed, Corporate debt recovery consultant and event manager

Salary: $55,000

House, 1,667sqm block, East Tamworth, NSW

Year purchased: 2012

Number of bedrooms, bathrooms, garaging and any other descriptor details: Amazing views, 4 bedrooms, 2 bathrooms, 2 care spaces, huge lounge room with views all over town, renovated kitchen, renovated bathroom, large laundry with sewing area, polished timber floors, fire place, ducted reverse cycle, beautiful pool, full size tennis court, double car accommodation, work shop and loads of storage.

Cost: $450,000

Deposit: $200,000

Why did you choose to buy in a regional area?

I had lived in Sydney for 10 years and there was no way Tim and I could afford to buy in the suburbs we wanted with the house size we needed to accommodate our two young children. So we decided to look outside of Sydney to enter the property market and to better manage our work/life responsibilities.

Once Tim secured a position with Tamworth’s local Motor Group, we made the decision to move to Tamworth, and were surprised to find that within only a few months we have been able to purchase a house and our cost of living has reduced.

Why did you want to buy in Tamworth?

First of all, Tamworth is a beautiful area to raise and grow a family. Also, we wanted a house and backyard with plenty of space for our kids and their friends to play and enjoy themselves. We really wanted our house to be a self-contained entertainment centre with a swimming pool, tennis court and space to run around so they could stay at home more and we could enjoy time as a family.

Have you lived in a regional area before?

I have always lived in capital cities. I was raised in Perth and moved to Sydney when I got older. So making to transition to Tamworth was a little bit of an adjustment for me. But Tim on the other hand grew up in a similar sized city in New Zealand, so he made the change very easily.

A common view of regional areas is that they do not have many employment opportunities, or leisure options. What has been your experience of this?

I do not agree with this. There are plenty of job opportunities in a very large range of industries in Tamworth, especially as the city grows more. I have also noticed there is a lot of potential for people to start businesses and be hugely successful too.    

How did you hear about the area and properties?

Tim and I love to scan realestate.com.au from time to time and we happened to stumble across our current house. At first we weren’t too keen on it from the images we saw. But we decided to take a walk through of the house anyway and ended up buying the house!

Has this been a significant lifestyle shift for you?

Yes, having the husband home more and being able to work my life around the kids instead of them work around mine. It has also been great to expose the kids to some unique experiences like milking dairy cows, something they probably won’t have done if they lived in Sydney.

How long do you see yourself living here for?

To start off we were committed to staying in Tamworth for 2 to 5 years. However, the longer we stayed here, the more friends we made and the more we got involved with the community we actually increased our commitment to 15+ years. So really a long-term plan to live here.

Read over the page for their five steps to a successful regional relocation

Home buyers looking for regional options will find themselves easily catered for, even if currently looking in the capital cities. With state and territory government pushes on to get skilled workers moving to regional areas, regular expos and events are held to help people move further out. For instance, the Regional Victoria Living Expo that is held each year from Good Move, a government initiative, showcases all the different regions. 

They have five steps they suggest for a successful regional relocation:

1. DO YOUR HOMEWORK
   
   Think about what you’re looking for and what you would like around your new home. Whether it’s schools, housing, certain kinds of employment, health care, access to public transport, access to Melbourne – there’s bound to be a place that ticks all the boxes for you. Think about your spouse’s employment needs and how they can be met too.
   
   
2. VISIT BEFORE YOU DECIDE
   
   There’s no substitute for spending time in an area. Get to know some of the locals. Ask them about the area – what’s good and not so good. Talk to real estate agents, school principals, hospital administrators, business owners and local Council staff. Explore the different kinds of lifestyle – regional city, a small town or hobby farm.
   
   
3. RENT FIRST IF YOU'RE NOT SURE
   
   If you’re in any way unsure about your move, rent before you buy. You can spend enough time to get to know an area without committing to a major financial decision. And if you decide this part of regional Victoria is not for you, it’s easier to explore another.
   
   
4. TAP INTO THE COMMUNITY
   
   Regional Victorians are a friendly lot, so becoming part of your new community should happen very quickly. Through school, work, sports clubs and service clubs, there are people ready to reach out and make you welcome. So don’t be backward in coming forward.
   
   
5. BE PATIENT
   
   It won’t happen in just a day. Give yourself time to build the networks and connections you need to feel at-home. Once you’ve moved, make sure you immerse yourself in exploring the area, particularly on weekends and holidays, rather than living ‘between’ Melbourne and your new home. You’ll be surprised how much there is to see and do in regional Victoria and you’ll feel more at home more quickly.

Source: Victorian Government’s Good Move