There has been a high influx of first home buyers that have entered the property market in 2020, resulting in a growth of 50.4% between the December quarters of 2019 and 2020. This further boosted an already strong market with record low interest rates and increasingly lenient bank lending policies.
In the December quarter of 2020, all capital cities saw a surge in price growth annually, with the weighted average Australian median house price increasing by 6.0% to $825,205. The national median family weekly income did grow by 1.8% over the same period, but was not on-par with median house price growth, resulting in the home affordability index decreasing by -1.8%.
Housing affordability is now an issue more than ever, especially within metro capital cities. For first home buyers and investors, finding an affordable option in capital cities can be challenging. This is especially true as the state average loan only makes up approximately half of the median house price in Sydney and Melbourne, at 53.3% and 53.8% respectively. Those in Hobart and Brisbane can enjoy greater affordability, with the state average loan making up 63.3% and 76.9% respectively of each capital city’s median house price.
Regional areas have become the most attractive option throughout 2020, with evidence of buyers capitalising on lower median property prices. 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.
Based on the above methodology and selection criteria, the following 10 regional locations were deemed to be ‘stand out regions’; affordable regional areas with solid fundamentals for sustainable future growth:
- Whitsunday LGA | QLD
- Mackay LGA | QLD
- Toowoomba LGA | QLD
- Port Stephens LGA | NSW
- Greater Hume Region | NSW
- Federation LGA | NSW
- Greater Bendigo City | VIC
- Greater Geelong LGA | VIC
- Warrnambool LGA | VIC
- Circular Head LGA | TAS
in PRDnationwide Research