With achievable median property prices and rental yields superior to those offered by capital cities, Australia’s twenty-ninth biggest city deserves a look-in.
Wagga Wagga, with a population of 63,000, is New South Wales' largest inland city. It has essential health infrastructure, tertiary education offerings through Charles Sturt University, and a quality commerce and retail hub. Wagga Wagga services a broader Riverina regional population of 200,000.
Located along Australia’s national (Hume) Highway, transport and warehousing are important industries, with Toll Holdings a major employer. Heinz (processed food), Teys (abattoirs), Cargill (grain) and Riverina Oils & Bio Energy are also employers which manufacture agricultural products from the region.
The Kapooka army recruitment base and the Forest Hill RAAF logistics and training base are staples to the economy.
The Murray Darling Basin supports the agriculture industry. Heavy clay soils have been the subject of much conjecture over the years. Parts of Wagga Wagga do suffer localised flooding, mostly in pockets to the north, the historical part of the city. The suburbs to the south of the city are newer and on higher land.
During 2015, there were approximately 77,000 jobs spread across the Riverina region. For the two-year period ending August 2015, the region’s growth in jobs had been neutral compared to the 3 per cent national increase. Propertyology believes that the outlook for jobs in the region is a healthy one largely due to the significant extra demand for quality agricultural products from Asia’s fast-rising middle class. Free Trade Agreements recently signed with South Korea, Japan, and China (India is also expected to follow) pave the way for a huge opportunity for Australian agriculture. The region is Australia’s biggest producer of wine grapes, rice and chicken, while beef and grain are also very prominent.
With numerous wineries and picturesque landscapes, cottage tourism is popular in the region. According to Destination NSW, visitors spent more than 2.5 million nights in the Riverina in the year to March 2015 – up by 4.4 per cent on 2014. Overall visitation to regional NSW increased by 4.1 per cent.
Significant job creation projects in the region’s pipeline include:
- A $75 million Intermodal Freight and Logistics hub in Wagga Wagga
- New dam infrastructure proposed at Lake Coolah and Narrandera
- A $2 million freight terminal at Leeton
- A $14 million new shopping centre in the Wagga Wagga suburb of Estella
- A large discovery of tin reserves at Ardlethan
It might surprise people to know that Wagga Wagga’s 7.1 per cent average annual price growth over the fifteen years since the turn of the century was better than Greater Sydney’s price growth of 6.3 per cent over the same period. Out of 550 local governments in Australia, Wagga Wagga’s property market was ranked 240th on total return (average annual price capital growth and rental yield) over the fifteen years since 2000.
Average annual population growth over the last ten years of 0.9 per cent is credible. A young demographic, a labour force with a good skills base, cost of housing almost 50 per cent below the national average and household incomes just below the national average add to the very solid fundamentals of the region’s property markets.
Property values increased by 2 per cent to 4 per cent during 2015. Of more significance, property sales volumes were the highest Wagga Wagga has seen since 2009; this is a good indication for local confidence.
As with most of Australia, building approvals in Wagga Wagga have been increasing over the last few years. The housing supply pipeline mostly contains detached houses with a few new estates popping up. The rate of new supply appears to be more sensibly controlled than many of Australia’s higher-profile cities.
The factors likely to influence housing demand and supply, combined with Wagga Wagga’s economic profile, are such that Propertyology forecasts its property market to be a steady performer and potential for a superior return to property investors than higher-profile cities such as Sydney and Melbourne over the next few years. Investors could do a lot worse than Wagga Wagga.
Simon Pressley is Managing Director of Propertyology. Having being awarded Australia’s buyer’s agent of the year on three consecutive occasions, Simon is a REIA Hall Of Fame Inductee. Propertyology’s core business involves full-time analyses of property markets all over Australia. Working exclusively for property investors, their service involves buying properties in strategically chosen locations all over Australia.