We’re a nation on the move – welcoming new arrivals to our shores, and also shifting internally between regions. Our tendency to cross borders is having a big impact on the property market.
Australia is one of the most culturally diverse countries in the world, attracting 1.3 million immigrants in the last five years alone. And with all these people needing somewhere to live, the demand for property has increased.
Today, 40% of migrants hail from Asia – particularly China and India. And this can give property buyers hoping to cash in on migration ideas of what to look for in a property.
As the McGrath Report 2018 notes, Chinese buyers have a strong preference for suburbs with established Asian communities – and properties with an elevated position, good feng shui, and an 8 in the address or sale price is highly prized.
How to find areas desired by different cultures
John McGrath, Founder & Executive Director, McGrath Estate Agents, says multicultural precincts can offer good buying opportunities. He explains, “Many studies of areas favoured by specific ethnic groups show that these residents love their suburbs and steadily improve them. It’s not a bad strategy to look for locations that appeal to particular migrant groups as they often become gentrified over time. Darlinghurst and Paddington in Sydney for example started out with high Greek populations.”
So how can buyers recognise those areas favoured by particular cultures that could have future growth potential? McGrath says, “Property investment is a body contact sport. You’ve just got to get out there and see what’s happening in a suburb. Look for signs of change like thriving retail hubs and new developments that may not yet fit into an area.”
The move to regional Australia
Outside of the big cities, migration of a different sort is impacting regional property values. With a national median home price of $354,105, regional Australia can offer far more bang for a buyer’s buck than capital cities, where the median value nationally is $655,132. And it seems plenty of people are taking advantage of this, heading out of the rat race to enjoy a sea or tree change.
In New South Wales, the fastest growing regional areas are Maitland in the Hunter Valley and Shellharbour in the Illawarra – both having notched up over 50% population growth since 2006. In Victoria, the Geelong region and Ballarat have both seen swelling resident numbers, and in Queensland, some parts of the Gold Coast and Sunshine Coast have seen their populations rise by as much as 460% in the last ten years.
Rising property values
Population growth is helping to underpin demand for property in regional Australia, with home values outside our capital cities rising 4.2% nationally over the last year. Sure, that’s marginally behind capital city price growth of 5.5% nationally, but it’s a decent result nonetheless. However, this is eclipsed by price growth in some popular regional areas. CoreLogic figures for instance, show that in the Illawarra values have risen by up to 17% in the past year.
According to McGrath, “Regional areas can offer good value for property buyers, and in some of our most expensive cities like Sydney, home owners may struggle to upgrade because of the transaction costs. But with the backing of healthy increases in home equity, it can be tempting to cash in on the value of a property and enjoy a change of lifestyle elsewhere.”
Look for proximity to larger hubs
The downside of regional living, says McGrath, can be fewer employment opportunities. But this could be set to change.
He explains, “As more businesses migrate to online and more people begin to work remotely, the availability of jobs in a local community may not be so much of an issue in the future. That said, the regional locations to look for are those with proximity to bigger cities with business and population hubs.”
No matter whether you plan to buy in a suburb with a multicultural buzz, or you’d rather unwind with a tree or sea change, talk to your Aussie Broker to organise the mortgage to make it all happen.