Top 10 Affordable Regional Areas 2021
PRD’s latest report ‘Stand Out Regions – Top 10 Affordable Regional Areas 2021’ gives new hope to anyone looking to break into the property market, or those wanting to expand their investment portfolio.
The introduction of the HomeBuilder scheme, record low-interest rates, and increasingly lenient bank lending policies have resulted in a surge in housing demand and has unexpectedly pushed up property prices as COVID-19 restrictions are eased.
All capital cities saw a surge in price growth annually, with the weighted average Australian median house price increasing by 6.0% in the past 12 months to the December quarter of 2020. The national median family weekly income only grew by 1.8% during this time, which suggests an imbalance in growth. Not surprisingly, the Australian home affordability index decreased by -1.8%
The New South Wales state average loan only makes up 53.3% of Sydney’s median house price (in the December quarter of 2020). This can eliminate many buyers, especially those who might be making their first step into the market. Similarly, buyers in Melbourne might also be priced out, as the Victorian state average loan only makes up 53.8% of the Melbourne median house price.
Regional areas have become the most attractive option throughout 2020, with evidence of buyers capitalising on lower median property prices. Those in Sydney can look to Port Stephens, Greater Hume, and Federation Local Government Areas. Those in Melbourne can look to Greater Bendigo, Greater Geelong, and Warrnambool.
The ‘PRD Stand Out Regions’ report highlights affordable regional areas in QLD, VIC, NSW, and TAS. These areas not only have median price affordability, but also provide strong indicators for property investment, local employment growth, and a sustainable economic future.
5 selection criteria were used to select the top 10 regional areas:
- Affordability – the Local Government Area (LGA) has a median price below the maximum affordable property sale price (average state loan + 20% deposit).
- Property trends – to ensure statistical reliability, the LGA will have 20 transactions or more in 2019 and 2020, with positive price growth within that time period.
- Investment – to ensure solid investment opportunities, the LGA will have an on-par or higher rental yield than its capital city, as well as an on-par or lower vacancy rate compared to its capital city.
- Project development – the LGA will have a high estimated value of future project development, with a higher concentration of commercial and infrastructure projects to ensure a positive economic outlook.
- Unemployment rate – as of the September quarter 2020, the LGA will have an on-par or lower unemployment rate than the state average, to ensure there is local job growth.
To find out what other Regional areas have made it into the PRD Stand Out Regions report click here.