Ballarat to Burnie: Why regional property investing beats a city buy

Some of Australia’s top areas for property investment are in regional areas, beating out their respective capital cities, a new report shows.

Towns including Ballarat in Victoria, Burnie in Tasmania, Dubbo in New South Wales and Mackay in Queensland are some of the best places to buy for affordability, rental income and return on investment, the PRD Real Estate Roaring Regions report found.

The report analysed regional local government areas in Queensland, NSW, Victoria and Tasmania for their affordability, rental yields and vacancy rates, project development and unemployment rates to pinpoint the top ten across each state.

PRD Real Estate chief economist Dr Diaswati Mardiasmo said regional areas generally saw stronger rental yields than their capital city counterparts, and many saw equal or stronger capital growth.

“People always ask me ‘If you had a lazy $1 million where would you invest?’ and I always say regional areas,” Dr Mardiasmo said. “This is the proof in the pudding — there is a lot going on in regional areas.”

For a town to be considered affordable, it needed to have a median house price of less than $600,000 - which was about 62.4 per cent less than Sydney, 33.9per cent less than Melbourne, 27.3per cent less than Brisbane and 18.9 per cent less than Hobart.

Victorian hotspot sees investors return

In Ballarat, the median house price was $570,000, slightly lower than two years ago, but still much higher than a decade ago, with the former gold-rush town seeing a median ten-year growth for houses of almost 93 per cent.

Dr Mardiasmo said not only were prices relatively low, but there was a strong supply of new housing stock set to commence building this year.

“It means that there are more chances for people to get into the market,” she said.

Ray White Ballarat agent Jo Thornton said investors had started coming back to the town in January this year after 18 months of low activity. She said owner/occupiers from Melbourne had also started to come back in part due to the success of the town’s schools.

“Quite often they are getting kids into Ballarat Clarendon College [rated number one for VCE results in the state in 2023] - either buyers from Melbourne or people on nearby farms who want a house in town,” Ms Thornton said.

There is interest in those homes that sit around the $600,000 category including this Ballarat Central home.

Tasmanian infrastructure boom lures buyers

Across the Bass Strait in Burnie, investment in projects was one of the main reasons for the town’s high rating, Dr Mardiasmo said.

“There are about $1.6 billion worth of projects planned — that is a really high figure for a regional area,” she said.

Along with its infrastructure boom about to go off, the town on the northern coast of Tassie had a higher rental yield than Hobart’s (3.7 per cent compared with 3.5 per cent) and a much lower median house price ($435,000 compared with Hobart’s $740,000).

It also had a median house price growth of more than 97 per cent in the past decade.

“Many people may not realise what a gem Burnie is,” Dr Mardiasmo said.

Elders Real Estate Burnie agent Wendy Cunningham said buyers advocates, investors and sea-changers from the mainland had identified Burnie as an area about to boom.

“A lot of people have been on holidays here and loved it and then moved back down,” she said. “We call them ‘climate refugees’ — they come here from Queensland to escape the heat.”

She currently has interest in this home in the Burnie suburb of Hillcrest from both investors and owner-occupiers.

This article was originally published on view.com.au.