Gympie homes treble in value as new median prices revealed
NEW research from respected property market research firm Propertyology has found that median house prices in 111 Australian locations, including Gympie, have trebled (or more) over the past 20 years.
- CLICK HERE: Council sparring partners to stand side by side at Chamber of Commerce meeting tomorrow
- Tony Perrett on why low income residents will cringe at today's the State budget
Other Queensland cities that experienced the same growth were Brisbane, Gold Coast, Sunshine Coast, Noosa, Scenic Rim - Beaudesert, Toowoomba, Lockyer Valley, Whitsunday, Warwick, Stanthorpe, Hervey Bay, Bundaberg, Yeppoon, Somerset, Moranbah and Roma.
Analysis was conducted over the 20-years ending December 2018 on more than 180 Australian towns and cities, all with a population of 10,000 people or more.
"Whether someone purchased real estate in any of our eight capital cities 20 years ago or in a majority of Australia's non-capital locations, today it's worth at least three times what you paid for it,” Propertyology head of research Simon Pressley said.
"I don't know about anyone else, but an average annual capital growth rate of circa 6 per cent across 20 years sounds damn good to me, especially at a time when Australia's two largest cities have dropped 10 per cent in value in the past 12 months.”
Mr Pressley said the median house price in Sydney two decades ago was the most expensive in the country at about $220,000, however, anyone who bought in a major regional location back then would have paid a fraction of that price and achieved a similar growth rate over the same period.
He said that, contrary to generalisations that 'regional' means 'high risk', local economies of numerous regional towns and cities are more diverse than several capital cities.
"There's risks and opportunities within every location. For capital cities and non-capitals, the years when a location's property market performs best are when local economic conditions and buyer confidence are strong, and vice versa,” Mr Pressley said.
"Generally speaking, locations with a more affordable median house price have more upside potential for capital growth. For that potential to be realised, the real skill is being able to identify the locations with positive leading economic indicators.”
There's obviously plenty of people who enjoy the inner city our suburban life of capital cities, he said, but only a select few have bothered to think why a whopping 8.4 million Aussies prefer not to live in one of those concrete jungles.
"As a homeowner, beauty is in the eye of the beholder, however, as an investor, beauty is nothing but a barrier for the brain operating at its optimum potential,” he said.
The fact is that the median house price of 103 regional cities and towns trebled in price over the past 20 years.
Mr Pressley said regional Australia's population has increased by an average of 1 per cent per year over the past 17 years (when ABS records began) - that's a higher average annual population growth rate than Adelaide and not too far behind Sydney's 1.4 per cent annual average over the same period.
"The lifestyles, the infrastructure, the food experiences and the scenery in most regional locations is significantly better than what those who haven't been there appreciate,” he said.
"Personally, I love investing in these locations. Instead of sinking large amounts of capital in to one expensive asset or loading up with multiple properties in the same city, I prefer to minimise my risk, while taking advantage of more opportunities. It's smarter to break the investment capital into smaller pieces and invest in multiple affordable properties in a diverse range of locations.”
In addition to the historical evidence confirming that there's capital growth potential inside and outside of capital cities, Mr Pressley said the higher rental yields from more affordable properties provide better cash flows, which means that big is not better.
Here are some examples of locations across Australia where the median house price has trebled over the past 20 years, each with a different mix of capital growth rates and rental return
Mr Pressley stressed that, while it is always interesting to consider price changes over long periods of time, it's impossible to invest in the past and that historical performance is not an indicator of future performance.
"The most important lesson to learn from historical data was that 100-plus towns and cities produced great growth across two decades. While it occurred in different years for different locations, they all had stages of peaks, troughs and sideways movement,” Mr Pressley said.
"We've all heard the story about a one-industry mining town called Moranbah losing $200,000 in one year back in 2013, but Sydney's pricey Inner-West, the so-called 'blue-chip' Balmain, also lost $225,000 over the 18 months subsequent to Sydney's peak in August 2017.
"Frankly, in a country as big and diverse as Australia, I wouldn't invest in Moranbah or Balmain, however, I suspect most people would be surprised to learn that the average annual change in median house price of their municipalities over the past 20 calendar years was 8.1 per cent and 7.8 per cent respectively.”
He said most Australians currently pay between $300,000 and $650,000 for a house in a town or city with a reasonably diverse economy, with plenty of regional locations having both in spades.
"The research clearly shows that regional real estate has just as much potential as capital cities, which is why smart investors make an objective assessment of every location in Australia before buying.”
The full list of locations where median house prices trebled between December 1998 and December 2018 is:
Brisbane, Gold Coast, Sunshine Coast, Noosa, Gympie, Scenic Rim - Beaudesert, Toowoomba, Lockyer Valley, Whitsunday, Warwick, Stanthorpe, Hervey Bay, Bundaberg, Yeppoon, Somerset, Moranbah, Roma