Owner-occupiers and investors are leading the charge for entry-level housing in regional New South Wales, according to real estate group Raine & Horne, with the possibility of price growth of up to 15% by April, 2014.
“It appears the news of robust price growth in Sydney is starting to impact regional real estate markets, with local buyers vying with growth- and yield-hungry investors for affordable real estate,” says Angus Raine, executive chairman and CEO of Raine & Horne.
However, Raine says property owners are still waiting for more evidence that the price growth achieved in Sydney will translate to their region.
“[They] appear cautious about jumping the gun early, and conceivably missing the opportunity to realise potentially bullish short-term capital growth.”
With prices predicted to surge, Adam Porteous, principal of Raine & Horne Batemans Bay, says shrewd buyers and investors are eager to acquire entry-level property on the NSW south coast.
“Entry-level homes in Batemans Bay are always on the menu for owner-occupiers, investors and those looking for holiday homes – although we’ve also recorded some sales of homes valued between $900,000 and $1 million in the past few months,” he says.
Porteous confirms that listings in the Batemans Bay region are down by as much as 40%, as homeowners wait for more evidence of capital growth, particularly as prices have been flat in Batemans Bay since the GFC.
“People are reading about the market spurt in Sydney but haven’t yet made the decision that it’s translated to Batemans Bay.
In the state’s Snowy Mountains region, Don Menchin, principal of Raine & Horne Cooma, confirms that entry-level and middle range homes are in hot demand.
“For example, last weekend we sold a four-bedroom, tri-level home at 31 Tulong Avenue, Cooma, for $400,000 following the first open home. That said, the majority of buyer enquiry is for homes priced between $170,000 and $340,000.”
Buyer demand for entry level property in Cooma is 20% stronger than the same time last year, according to Menchin, while listings are down by about 25%.
“The combination of cheap real estate, lower interest rates and growing consumer confidence is driving up buyer demand for affordable housing in Cooma,” he says.
“Sharply rising rents are also making home ownership a more sensible proposition for tenants, which is creating additional demand pressures.”