Some of the country’s largest regional areas are leading the way for growth in rental rates, according to a new report.
The quarterly Regional Market Update from CoreLogic RP Data looked at some of Australia’s larger regions, highlighting their growing rental rates over the past 12 months.
The Richmond-Tweed region in NSW led the way in rental rates from February 2015 to February 2016, with houses rising 10.0 per cent to $440 per week, while units climbed 8.6 per cent to $380.
Across the Illawarra region in NSW, the weekly rent for houses increased by 4.7 per cent to $450, while units rose 4.1 per cent to $380.
In NSW’s Newcastle and Lake Macquarie region, houses rose 1.3 per cent to $400 and units remained unchanged at $370.
The Gold Coast region was Queensland’s top performer, as houses jumped 4.2 per cent to $500 and units climbed 5.4 per cent to $390.
In the Sunshine Coast region, houses rose 2.2 per cent to $460 and units jumped 4.2 per cent to $375.
In Wide Bay, although houses remained unchanged at $290, units rose 1.8 per cent to $280.
Houses in the Cairns region remained steady at $380, while units climbed 3.6 per cent to $290.
Latrobe-Gippsland was Victoria’s best-performing region, with houses rising 3.8 per cent to $270, while units jumped 4.5 per cent to $230.
In the Geelong region, houses climbed 1.5 per cent to $335 and units rose 1.8 per cent to $285.
CoreLogic research analyst Cameron Kusher said the Illawarra’s strong performance was largely driven by surging property prices in Sydney, which has driven many buyers and investors from the city.
“With mortgage rates at their lowest levels in 53 years and tipped to drop even further, we’re likely to see housing purchases popular across larger coastal regional markets throughout 2016,” he said.
Meanwhile, Victor Kumar, property strategist and director of Right Property Group, said that investors should be looking at more than just rent prices when considering purchasing in a regional area.
“You also want growth along with it, as well as liquidity,” he said.
“You need to look at employment and net migration into that area because that would then determine your growth.”
Mr Kumar said investors can analyse the liquidity levels of an area with one simple strategy.
“How I judge liquidity is I want at least three brand-name real estate agencies in the area, within 10 minutes’ driving distance.
“Because for them to survive, there has to be enough turnover in the area in terms of sale. So it’s a really easy way to gauge.
“If an area can support three brand-name real estate agencies, franchised ones, it gives you a very strong indication that there is enough turnover in the area.”