The regional areas surrounding New South wales have been showing strong signs of growth, with many believing that they will soon outrank Sydney in terms of property value gains. This comes at a surprising time, as increased activity in the city centre has left outlying areas comparably quiet.
One factor that may be influencing this change could be Sydney’s extreme property prices. According to CoreLogic RP Data, the average house price in the city has risen to over $1.1 million, a cost that will push away all buyers aside from wealthy home buyers and high-capital investors.
Regional areas are clearly less affected by high property prices, but is it possible that Sydney’s premiums are spreading into the suburbs?
Neighbouring areas experiencing accelerated growth
Cobbitty-Leppington is a small area of the Macarthur region of NSW, lying 55 kilometers south of Sydney’s centre.
Since December 2015, this area has shown an astonishing growth of 26.1%, according to data from the Housing Industry Association.
During the same time frame, this otherwise small area has received over $360 million worth of residential building approvals to pave the way for the rise in demand. That’s over 20% of what the city of Melbourne has had in the same time frame. When you consider that Coppitty-Leppington had a population of under 10,000 in 2014, it puts these percentages into perspective.
This is by far the most extreme example of rapid growth in NSW’s regional areas, but similar housing activity is also observable in areas such as Wollongong, or fringe towns such as Riverstone.
The region’s sales activity is on the rise
Cameron Kusher, research analyst for CoreLogic RP Data, provided his opinion on the mass migration to more affordable areas:
“What you are finding, particularly in areas like Newcastle and Wollongong is that as people are getting priced out of Sydney you are seeing a lot more activity there, values rising.”
CoreLogic also reported on a huge rise in sales value, which only goes to prove the phenomenon. Of the year ending March 2016, the two areas with the highest growth were NSW’s regional towns Kyogle and Narrandera, which saw near $53 million and over $32 million respectively.
Kyogle’s total sales value rose by nearly 80%, whereas Narrandera grew by an unbelievable 93%.
Based on these numbers, many investors are now setting their sights outside of the city to regional areas.