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90 minutes from the big smoke

John McGrath
Thursday, March 07, 2019

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A combination of recent huge price hikes in the cities, along with commuting gridlock and the ability to now telecommute courtesy of technology, has made living outside of the big smoke more popular than I’ve seen for 30 years. 

Young couples and empty nesters alike are seeing great value in living nearby, but not in, the bigger cities.  I call it the 90 minute arc - areas within 90 minutes of metro cities such as Brisbane, Sydney and Melbourne have been most popular, as they allow easy access to family and grandchildren as well as other business and cultural activities. 

Areas like the Central Coast, Hunter Valley and Southern Highlands in NSW; Geelong and Ballarat in Victoria; and Toowoomba and the Sunshine Coast in Queensland have been some of the most in-demand areas.

The greatest demand has been initially from owner occupiers but there will be a strong follow-on from investors in the near future.  Many investors can no longer afford to buy inner city and are looking to put their investment dollars into safe assets in areas with strong growth prospects. 

We’re even seeing a bit of seachanging amongst real estate agents, as they too recognise the lifestyle available in regional locations, mainly those close to the capitals so they can leverage their city buyer databases to market regional listings to seachangers, downsizers and investors.

Increasing flight services means commuters can get back to Sydney in less than 90 minutes by air.

It’s not just cheaper housing that is inspiring owner occupiers. It’s very much about the lifestyle benefits – less traffic, less pollution, less people and every amenity you could possibly need, including shops, beaches, schools, hospitals and kids’ sporting fields all within a short drive of home.  

Following the booms in Sydney and Melbourne, affordability constraints and lending restrictions that are reducing buyers’ budgets are inspiring investors to look further afield.

More affordable capital cities like Brisbane, Hobart and Adelaide are good choices for investors based on long-term capital growth data and many regional areas also provide great returns.

For example, in regional NSW, it’s far cheaper to buy in and the gap in 20-year capital growth compared to Sydney is only 16.3%.

A recent report by CoreLogic looked at capital growth over the 20 years to January 2019. Regional areas, as expected, did not have as much growth as capital cities, which have continually strong population growth and a growing undersupply, however the gains were still impressive.

 

Regional vs City

Capital Growth Comparison

2009 – 2019

National 197.4%

Combined capital city markets 212.4%

Combined regional markets 150.3%

Sydney 201.9%

Regional NSW 185.6%

Brisbane 182.8%

Regional QLD 123.6%

Melbourne 274.6%

Regional VIC 179.5%

Adelaide 193.8%

Regional SA 125.1%

Perth 148%

Regional WA 77.5% 

Hobart 237%

Regional TAS 167.2%

Darwin 38.4%

Regional NT 129.5%

Canberra 230.7%


The quality of developments in some areas within the 90 minute arc of capital cities has increased significantly off the back of a wealthier, more sophisticated market arriving. 

The NSW Central Coast is now designing and building high quality apartment buildings of the same standard as Sydney, which have proven very popular with empty nesters seeking a seachange.

Beach culture has been a part of our DNA forever. From a property perspective, living by the beach has never been as popular as it is now. Sydney’s Bondi was considered a somewhat unappealing address when I started in real estate and today it is probably the hottest address in the country. 

Once, if you were uber-wealthy, there was only one place to purchase – Sydney Harbour. Now, just as many of the super wealthy choose beach suburbs above all else. 

One of the greatest aspects of regional living is the affordability of beach homes. You do not need to be wealthy to live an amazing beachside lifestyle in many regional locations around Australia.

With Sydney and Melbourne correcting in value by 10% to 15%, this might slow down the movement of buyers out of the big cities in 2019 but we think a significant number will still choose to relocate. This will be an ongoing trend as our cities get bigger.

Published: Thursday, March 07, 2019


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