Basic economics dictates that demand and supply is affected by price and as Sydney’s median house price tag hovers around $1.17 million, it stands to reason that many Sydneysiders are looking to go further and further afield into country New South Wales to find a home or investment property that’s more affordable.
This migration from the City to the Bush is pushing up house prices in regional New South Wales, and in some areas recently, price growth is outstripping Sydney’s price growth. Most of the regional markets within 250 km of Sydney have experienced 10 per cent growth over the past 12 months.
Orange in the Central West region of New South Wales, 250 km from Sydney, has experienced 11.8 per cent price growth in the past 12 months for example. Overall regional New South Wales median price rose to a record $475,000 for the June quarter.
Crunching the numbers for first home buyers and investors, the average first-time buyer home loan in New South Wales is around $361,000, plus a 20% deposit creates a sweet spot of around $450,000 where anything under $450,000 is affordable and anything over starts to push first home buyers out of the market, unless they are able to create some kind of second income stream from their property.
The challenge for first-time buyers is the need to be close to employment or employment opportunities, which is why regional centres offering education and business hubs are proving to be the most popular destinations.
The challenge for investors is providing an affordable alternative product, ie renting options, for those caught out around the $450,000 affordability bubble who can’t yet afford to buy and who need to remain close to Sydney employment or a regional centre offering similar or alternative employment opportunities.
The Cost Of Buying In Country NSW.
Median Prices Under A First-Home Buyers’ Estimated Budget Of $450,000
| Regional city | June 2017 | Distance from Sydney (Kms) | 12 month growth |
| Albury | $299,225 | 560 | -4.2% |
| Armidale Dumaresq | $352,500 | 480 | -2.4% |
| Bathurst | $417,000 | 200 | 8.3% |
| Clarence Valley | $360,000 | 670 | 9.1% |
| Dubbo | $337,750 | 390 | -2.1% |
| Eurobodalla | $445,000 | 340 | 13.4% |
| Lismore | $372,000 | 740 | 6.3% |
| Orange | $370,000 | 250 | 11.8% |
| Richmond Valley | $265,500 | 700 | 4.7% |
| Tamworth Regional | $332,000 | 400 | 2.2% |
| Wagga Wagga | $342,000 | 460 | 1.4% |
Median Prices Above First-Home Buyers’ Budget
| Regional city | June 2017 | Distance from Sydney (Kms) | 12 month growth |
| Ballina | $597,500 | 750 | 13.4% |
| Byron | $910,000 | 780 | 29.2% |
| Coffs Harbour | $486,500 | 530 | 12.5% |
| Great Lakes | $485,000 | 250 | 9.9% |
| Newcastle | $620,000 | 170 | 23.5% |
| Port Macquarie-Hastings | $499,000 | 390 | 7.3% |
| Shellharbour | $645,000 | 110 | 17.3% |
| Shoalhaven | $537,000 | 210 | 17.8% |
| Tweed | $580,000 | 830 | 14.3% |
| Wingecarribee | $800,000 | 140 | 18.5% |
| Wollongong | $760,000 | 100 | 18.8% |
Source: Domain analysis of in-house median prices and Australian Bureau of Statistics Housing Finance data used to determine first-home buyer cut off point. Average first-home buyer loan NSW: $361,000 in May 2017, $357,800 in May 2016. Loan plus assumed 20 per cent deposit rounds to $450,000.
Tables originally published domain.com.au
