Up until recently, if you bought an investment property in the country, your capital growth goal required a longer-term approach, deterring some potential buyers. Likewise, while dreamers and schemers may have yearned for a seachange or treechange, the sacrifice of giving up a job in the city was too great.
But in 2020, this global pandemic has changed the way we live and work by normalising remote work and making people warier of high-density areas. These days, a relaxed lifestyle and all the benefits of regional living are more accessible, as the ability to maintain a career and a balanced family life is viable for the first time in many peoples' lives.
Of course, it's not all sunshine and daisies. With immigration halted, population growth in cities is set for a downturn, and the uncertainty surrounding Australia's 'Covid normal' future makes market forecasting unprecedentedly tricky. But with a positive outlook for the end of lockdown and improved infrastructure development in regional hubs, the stars are finally aligning for regional housing to have its time in the sun.
As Metricon's regional Victorian general manager Phil Barrett can attest to, Melburnians are increasingly interested in satellite-city and country living. "Real estate agents in some of our regional Victorian build regions are reporting that up to 50 per cent of their rental applicants are metropolitan Melbourne residents," he says. "They're people wanting to move out of the city and have a better lifestyle. They may be able to work from home, or are fine to travel an hour and a half to work if they're commuting once or twice a week."
Phil says there are three key factors to the rise of interest in regional Victoria's housing markets: affordability, rental demand and the perception that life in the regions is increasingly and sustainably viable.
Affordability
In Victoria right now, conditions are ripe for property owners and investors looking to take advantage of regional affordability. "For people who are buying in regional areas, there are property price differences anywhere from $50,000-100,000, mainly in the land price," Phil says. "The surprising thing is the rental yields in many areas are not that much less than what you would get in the outer suburbs of Melbourne." With interest rates low, and the Australian Government prioritising new home construction in the federal budget, now could be a once in a lifetime opportunity for owner-occupiers and investors alike.
Brad and Jane, Melburnian’s building with Metricon in Ballarat right now say the pandemic forced their hand. “If not now, then when?” says Jane. “We'd been looking at regional areas for investment for a while and then during the first lock-down, with our jobs relatively secure, we decided to kick off building an investment property”.
The couple says that their decision to move on a house and land package was supported by finding a home in an area with great schools and close to all of the amenities renters are seeking. Low interest rates were also a driver. “We’re really looking forward to being connected to an area with strong population and housing market growth”, says Brad. “Our land has already increased in value since we purchased.”
Vacancy rates
If you're thinking about moving regionally, but aren't ready to commit to buying a new home, you're not alone. Phil says it's the people just like you who are pushing the needle on rental yields and vacancy rates. "It might be one, two, or three years before people purchase a home in a regional area," he says. It's these years spent renting before you do decide to buy or build a place of your own, that are creating demand for rental properties in Victorian areas like Geelong, Ballarat, Warragul, Bendigo, Kilmore and Drouin. "So, affordability is one thing, but the vacancy rates are also very low in regional areas now," Phil says. "Rentals are comparable to outer areas of Melbourne."
Viability
Growth in regional centres is bolstering the viability of moving for many capital city-based families. "In regional Victoria, there are strong universities, hospitals, and pockets of industry related to farming and manufacturing. Healthcare and other public services provide plenty of employment opportunities and of course there's also the tourism industry. All of this supports an income-earning population," Phil says.
Increased access to amenities doesn't just attract new residents; it also encourages locals to stay. "Once upon a time, country kids left home and went to Melbourne for university," Phil says. "Now the institutions have improved in regional cities, so they're staying, and then the employment opportunities are improving, so they're staying."
Likewise, middle-aged demographics are returning to the regional areas they grew up in to provide a better lifestyle for their kids or to care for elderly parents. And as medical support improves in regional hubs, retirees are also drawn in, having to travel less to see specialists. As Phil says, "All of this drives a working population with an income that needs rentals as a stepping-stone to eventual purchase."
Choosing the right regional area
With thousands of square kilometres on offer across this Great Southern Land, how do you narrow down the search? You could be looking for a high-growth town to build an investment property, or maybe you want to live in a community with a certain buzz about it. Either way, the good news is that if it's the right spot, Metricon is probably already building there.
Metricon has been operating in some regional areas for over 20 years, and currently builds homes in 18 towns in Victoria alone. In fact, Phil says, Metricon is just about to hand over keys to the 10,000th home built in regional Victoria.
There is plenty of information readily available online to help guide purchase and investment decisions and Phil says Metricon’s regional team members are always happy to share in depth knowledge of their local markets. "Metricon knows which areas are pockets of growth," Phil concludes.
Metricon builds homes in VIC, NSW, QLD and SA including regional areas and satellite cities in these states. If you'd like to know more about regional builds, speak to one of our team members today. For more investment news and design inspiration, head to Metricon's blog, Home Truths. You can also subscribe to the newsletter here.
