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Smaller communities can sometimes deliver bigger returns

Smaller communities can sometimes deliver bigger returns

One in three Australians live outside our eight capital cities – which is another way of saying that there are lots of prime investment opportunities in regional Australia.

Want proof? Check out the latest median house price statistics from the Australian Bureau of Statistics, covering the 15 years to June 2019:

  • Regional Queensland outperformed Brisbane (83.0% growth v 75.4%)
  • Regional Northern Territory outperformed Darwin (92.3% v 92.1%)
  • Regional Tasmania outperformed Sydney (97.8% v 75.7%)

There are many high-quality investment opportunities out in the regions, if you know where to look.

Not all regional locations are created equal

That said, there are also lots of poor investment opportunities in regional Australia.

That’s the thing: you need to be smart, because there are many locations you shouldn’t touch with a bargepole.

The key is to dive deep into the data so you can identify regional towns and cities that are likely to enjoy consistent economic growth over the coming decades.

You also need to forecast population growth and property development, so you can forecast the supply-demand balance over that time period.

Focus on quality, not size

The takeaway for property investors is to be open-minded about great investment opportunities, whether they’re in big capital cities or smaller regional centres.

Sometimes, Sydney and Melbourne might be the best place to invest; at other times, it might be somewhere in regional Australia, like, say, Cairns or Wagga Wagga.

Let yourself be guided by the data, rather than gut instinct or the latest media headlines. 

There are lots of great property journos out there – but almost all of them live in Sydney and Melbourne, so their reporting tends to be skewed towards metro locations, especially our two biggest cities.

But when you take the time to dive deep into the data – like we do at InvestorKit every day – you discover that regional communities often outperform capital cities.

The numbers don’t lie.