NSW city of Orange offers opportunities for investors

Imagine rolling, picturesque landscapes and a vibrant and diverse night life and you will catch a glimpse of life in Orange – a city with much to offer. Located approximately 260 kilometres west of Sydney, the City of Orange in New South Wales is a rapidly emerging investors’ hub for many reasons and has been named by many authority figures as the next hotspot to invest in for many reasons, where investors can expect fantastic returns when buying property in this city.

So let me spell out the reasons why.

The city is located to the north and west of Sydney – Mitchell Highway links Orange to Bathurst on the east and on the north-west to Molong, Wellington, Dubbo and Bourke. West of Orange is Parkes (100 kilometres) and Forbes (125 kilometres), which are situated along the Newell Highway running from Brisbane to Melbourne. The Northern Distributor road opened in 2007 as a bypass and the city is served by the Orange Airport, a regional airport.

Two railway stations serve Orange – the main station, served by the Countrylink XPT service (daily), has been open since 1877 and runs between Sydney and Dubbo. The Xplorer service runs weekly between Sydney and Broken Hill.

The smaller station – Orange East Fork – was opened in 1970 and is situated on the branch line to Broken Hill. Indian Pacific provides services two times per week to Perth.

Recently, Positive Real Estate sold five four-bedroom house-and-land packages in beautiful Orange, which promise fantastic rental yields ranging from 7% to 14%, depending upon furnished, unfurnished or serviced/furnished options, which also offered a positive tax cashflow in just one year. Needless to say, once these deals were released to our investors they were snapped up within an hour!

So what makes Orange so special?

Plenty. The city shows all the markers of a growing, robust economy. Orange boasts the lowest vacancy rates in all of New South Wales, and the massive private and government infrastructure spending will continue to drive growth in the region, increasing the potential for huge profits.

Orange is a metropolitan city in every sense of the word, however it has managed to maintain its idyllic persona without sacrificing the best that city living can offer. For example, annual events such as F.O.O.D. Week, which is organized by the local food and wine industries attracts thousands of individuals to the region. The event is popular and impressive enough to be featured in Australian Traveller Magazine's list of “100 Greatest Gourmet Experiences”.

Newcrest Mining's Cadia Hill gold and copper mine, located 40 kilometres to the south west of Orange City, is slated to receive $2 billion dollars' worth of expansion to its facilities. This mine is the largest producer of copper and gold in New South Wales and employs approximately 1,000 people directly and about the same indirectly, bringing $1 billion to the local economy and continued operation for at least 30 years.

Orange has more to offer than simply mining. With a diverse mix of employers, including education, agriculture, health, manufacturing as well as mining, the growth is not dependent upon any one industry.

Infrastructure spending is booming in Orange. For example, Bloomfield Hospital is spending $250 million towards construction of a new general hospital, two mental health facilities and upgrades to four buildings as well.

Other works include $30 million from the state government towards a 30-bed aged-care facility, $47 million for a water pipeline from the Macquarie River to aid Orange City's water supply issues, and $12 million towards 49 two- and three-bedroom unit apartment buildings.

Orange has nearly a dozen primary schools and two Catholic Diocesan Primary Schools, and a number of secondary schools as well. Orange has its own university campus, Charles Sturt University (formerly University of Sydney) which has a recently built dentistry school.

Head of campus professor Kevin Parton told Central Western Daily that as more of the university's projects (such as a proposed medical school) came into play the rental demand would necessarily rise as students search for good housing opportunities while attending university.

“There are some shrewd entrepreneurs in Orange,” Parton said. “They know that with supply so low they'll get a good return.”

Despite the university's ability to keep up with rental demand on campus, Parton said that many students seek out private rentals as they get older instead of living on campus.

“We know that we can't provide that [private accommodation] so they must go out into the private market,” said Parton. “Lots of businesses are expanding, businesses like Cadia, Kinross, Jeff Hort... all of us are putting pressure on the rental market. As a result of this pressure we would expect more construction by the private sector.”

With all of this pressure on the market, and an extremely limited supply, investors will continue to see strong returns for quite some time. According to API Databank Market Watch, the previous decade showed an annual price growth of 8.3%.

Experts believe that Orange City Council's prediction made in 2005 of a 50,000 population by 2020 may be proven a conservative one, due to the massive infrastructure development and commitments for future growth by various industries and government entities.

Blessed by a forward-thinking council, Orange City's well managed strategy to handle growth will continue to be a positive influence on investments in the region, and with massive spending by both private and governmental entities, investors are sure to see solid returns for quite some time.

We recommend that investors take a closer look at Orange. With a very tight rental market, and a booming economy, this city is certain to present fantastic rental yields and positive cashflow opportunities.

Sam Saggers is CEO of Positive Real Estate.