Think capital cities see all the capital growth, while regional centres miss out? Think again. John Hilton scours the country for regions with a range of excellent opportunities
There is a simple solution to the surging prices and falling yields that have made some capital cities no-go zones for investors.
The catch is that it may involve you looking outside of your comfort zone. You guessed it: regional areas. The good news is that the regions actually offer benefits that their capital city counterparts often lack. Namely, more affordable prices and higher yields, which are two components of what Terry Ryder, founder of hotspotting.com.au, calls the “win, win, win situation”.
Ryder’s third component is that regional areas offer good prospects for capital growth, just as long as you pick the right place.
The downside of choosing the wrong area is that some regional markets can fluctuate greatly in value, if you invest somewhere that’s too reliant on one industry.
In addition to selecting areas with a variety of employment drivers, another way to go about it is looking at infrastructure projects on the horizon, says Ryder.
Why is this so? Infrastructure means more jobs, increased economic activity and improved amenities for residents – a perfect recipe for capital growth.
And if you want proof of just how well a regional area with a diverse economy and new infrastructure can perform, take a look 76km north of Sydney to Gosford.
“All of a sudden last year there was 20% growth in median prices which was common for Gosford city,” says Ryder.
“I say to people: ‘Well you have probably missed the best time to buy in Gosford, so look for the next location that has similar qualities, but has not had the same amount of growth.' Those places do exist.”
Nevertheless, Ryder believes that despite Gosford’s surge in values, it still offers good prospects for investors, in addition to other regional centres spread right across Australia. Read on to find out why.
QLD SUNSHINE COAST
The Sunshine Coast might once have been synonymous with tourism, but it is fast evolving into something much better, says Ryder.
In fact, the key strength of the Sunshine Coast now is its diversifying economy, which is being helped along by the billions of dollars invested in infrastructure projects.
“Suddenly they have got this whole new industry: the medical sector,” says Ryder.
“They didn’t have that before, but the state government has decided to build a $2bn hospital.”
The Sunshine Coast Public University Hospital will open with about 450 beds in 2016, with the ability to grow to over 738 beds. If required, it can be expanded to 900 beds beyond 2021.
The hospital is part of the 20 hectare Kawana Health Campus, which will include the hospital’s Skills, Academic and Research Centre, the co-located Sunshine Coast University Private Hospital and opportunities for health-related commercial developments.
“Suddenly all these other things are springing up,” says Ryder. “Another announcement is that there is going to be a big retirement village which is going to be next to the hospital.”
In addition to the thriving health industry, other key economic sectors include education, retail and construction.
Then there’s the $347m Sunshine Coast Airport expansion which is expected to boost the Sunshine Coast economy by $4.1bn over the first 20 years, and is projected to generate more than 2,200 jobs in the community.
There is also a whole new CBD to be built at Maroochydore
which will occupy the current grounds of a golf course.
“They are going to turn land there into a CBD, something that the Sunshine Coast doesn’t have at the moment,” says Ryder.
Another key infrastructure project is the $350m Sunshine Plaza expansion which is projected to create 6,900 full-time construction and operational jobs and 1,350 new retail jobs on completion.
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