Regional property more profitable than capital city property over the past quarter
Since taking off during the pandemic, regional property in Australia is still reaping the benefits according to new research. Let's find out why.
Many Australians decided to pack up their city lives and seek a tree or sea change during the pandemic, but even now that most restrictions are behind us, regional property is still thriving.
For the past six consecutive quarters, the Australian property market has seen increasing rates of profitability, according to CoreLogic’s figures.
In its latest Pain & Gain Report, regional Australia saw nominal gains for 94% of sales, compared to 93.7% of capital cities.
Overall, 93.8% of resold properties made a nominal gain over the past quarter, up from 92.4% in the previous quarter, for a total nominal profit of $38 billion.
The median nominal gain made nationally was $319,000, while median losses were at $34,000.
CoreLogic’s Head of Research Eliza Owen said this is a remarkable result with many trends from the December 2021 quarter carrying through to this past quarter.
“Houses saw a higher instance of profitability than units, at 96.2% and 88.6% respectively,” Ms Owen said.
“Investors had a lower incidence of profitability (91.4%) than owner occupier sellers (96.7%). As noted in previous quarters, hold periods between investor and owner occupier sellers were quite similar, with the lower instance of profit-making sales among investors likely being more a feature of the type of stock purchased, where investors accounted for over half of unit resales in the quarter (57.4%).”
Despite Sydney’s housing market seemingly slowing down, it still had the highest median dollar value gain from profit-generating resales across the capital cities at $536,500.
This means that the average Sydney seller saw their property values go up by $536,500.
Hobart saw the highest incidence of profit-making sales in the past quarter at 98.3%, followed closely by Canberra at 98.2%, meaning almost all sellers in these two capital cities made a profit when selling their properties.
Nationally, the average seller with a profit-making resale held their property for 9.2 years, but properties held for more than 30 years had the highest total median return ($770,000).
Regional residents express concern about lack of affordable housing
New research from UNSW Sydney, RMIT University, University of Sydney and University of South Australia explored the lived experiences of regional residents in the wake of the pandemic.
The research revealed the regional push exacerbated concerns about housing affordability and access to essential services for residents living in five regional cities: Albury-Wodonga, Cairns, Mildura, Whyalla and Woolongong.
Lead researcher Dr Laura Crommelin from UNSW Sydney said many regional respondents felt the affordability and availability of regional housing – particularly rental housing – was declining due to the population growth felt during the pandemic.
“Having affordable, spacious housing was seen as an important element of regional city living and of considerable appeal to young families,” Dr Crommelin said.
“Indeed, it was seen as a crucial part of maintaining the appeal of regional living for some participants.”
The research also highlighted that regional jobs usually don’t pay at a similar levels to metropolitan jobs, with some respondents who relocated mentioning that they had to adjust their income expectations.
“Our research also highlighted the high levels of frustration many residents felt with the provision of essential services,” Dr Crommelin said.
“There were particular concerns about the current lack of specialist health care and the waiting time for GPs. People also raised concerns about the likelihood of increasing demands on health and education as a result of population growth.”
By Rachel Horan
Originally published by Savings.com.au
