New South Wales property boom has migrated: Terry Ryder

The New South Wales property boom isn’t over. It’s just that it’s migrated from Sydney and now resides in regional NSW.

The latest Hotspotting research finds that there are twice as many suburbs/towns with growth property markets in the regions as there are in the capital city.

It’s really hard now to find suburbs with growth markets in Sydney. By “growth markets” we mean suburbs with rising sales activity.

Those that exist are mostly found in the distant outer reaches of the Sydney metropolitan area, in places like the Campbelltown and Liverpool LGAs in the south-west. This is yet another sign that the Sydney boom has run its course.

Most suburbs across Sydney are now what we call plateau markets. They’ve risen to a certain level over the preceding several quarters, passed their peak and have leveled off.

There are few instances of dramatic decline. This is one reason we don’t expect prices to fall to any great degree. As in 2004, the last time a significant Sydney boom ended after 2-3 chirpy years, price growth will fall away to increasingly low levels and values are unlikely to fall.

Meanwhile, the momentum has switched to regional NSW. This is good news for investors, provided they’re willing to shake loose from the capital city addiction that afflicts many consumers and consider the possibilities of buying in a strong regional city.

Buying in a good regional market presents what we like to call a win-win-win situation. Win #1 is lower entry prices. Win #2 is much better rental yields. Win #3 is good prospects for capital growth – provided you choose your target wisely.

There are plenty of places in regional NSW you wouldn’t want to buy. When we advocate regional locations, we’re thinking of those that meet some basic criteria.

You should be looking for a place with a substantial and growing population, in a strategic location well-connected to major centres by road, rail and air, at the heart of a broad region of people who travel to their regional city for retail, medical, education and other services – and, often, to retire.

The ideal targets will have economic diversity, good spending on infrastructure, low vacancy rates and one or two big kickers – specific events that represent the icing on the investment cake.

NSW, more than any other state or territory, has an abundance of strong regional centres that meet those standards. 

And there are numerous among them for strong sales momentum pointing to price growth.

The Central Coast has been strong for a couple of years now, having caught some momentum from Sydney. The Gosford and Wyong LGAs were among the first regional areas to rise and they, like Sydney, appear to have passed their peaks, with sales levels tapering off. 

But many others are rising. Newcastle and neighbouring precincts – including the Lake Macquarie, Port Stephens, Maitland and Cessnock municipalities – present as a large population centre with a bustling economy and plenty of growth markets. 

Sales levels have surged over the past 18 months in Port Macquarie, a strong coastal city greatly boosted by big spending on infrastructure.

Albury and its twin city Wodonga at the Victorian border fits all the core criteria as a regional centre worth considering and currently has numerous suburbs with growth markets.

These are many others with credentials, including Dubbo, Goulburn, Bathurst, Orange, Wagga Wagga, Tamworth, Wollongong and the towns of the Southern Highlands.

Terry Ryder is the founder of hotspotting.com.au. You can email him or follow him on Twitter.