Owning a home is a dream for many. However, with news of property prices surging higher each day, getting your foot on the property ladder can seem out of reach.
This is one of the many reasons first home buyers are looking at regional areas.
Why Are First Home Buyers Choosing Regional Areas?
- Affordability: Entry prices in metro areas are too high for many first home buyers, so they are house hunting in regional areas, where prices are affordable, compared with cities. Instead of buying a small apartment in the city, they are looking for larger houses in regional areas.
- Taking advantage of government schemes: Many new arrivals into regions were first home buyers who took advantage of the HomeBuilder grant. Most of these kinds of schemes have a property price threshold, which means buying in outer suburbs or regional areas is the only way to qualify for them.
- Lifestyle preferences: Some are ditching the hustle and bustle of city life, and moving towards the calmness that regional areas offer. These first home buyers are looking for dedicated office spaces and study corners in their homes. Properties in regional areas offer more space.
- Remote work: Many businesses allow their employees to work from home. In the past, if you were buying a home that was located away from your employer, lenders would probably decline your loan, as you’d likely leave your job. Now, after the pandemic, if you provide a letter from your employer confirming you can continue to work remotely, most lenders will accept it.
- Rentvesting: This is a trend that is becoming popular with younger Australians. With rentvesting, your first home is an investment property you rent out while you live in a more affordable area. This helps first home buyers find a home in a market they can afford and take advantage of rental yields and home equity.
Will First Home Buyers Continue To Buy In Regional Areas?
A recent report by NAB shows that first home buyers are opting to buy in metropolitan areas more often in some states. Between May and August 2021, first home buyer activity in metro areas increased by 24%, while activity in regional areas increased by only 16%. First home buyers are looking at outer-metro suburbs to find a bargain. Furthermore, activity slowed down in regional areas of Queensland and Western Australia for the first few months of 2021.
Historically, older households have dominated migration towards regional areas. However, younger families are now joining in the trend, due to affordability, preferences for more space, and government stimulus measures.
Which Regional Areas Are First Home Buyers Buying In?
These regional areas showed strong demand from May-August 2021:
- Regional NSW: East Tamworth, Dapto
- Regional Victoria: Melton, Ballarat, Sunbury
- Regional Queensland: Beechmont, East Mackay
- Regional Western Australia: Kalgoorlie
Do You Want To Buy In A Regional Area?
Here are some tips to help you buy a home in a regional area:
- Use our property postcode calculator to find out if lenders consider the location you’re interested in low risk.
- Make full use of the government stimulus and schemes available for first home buyers.
- Choose areas in emerging markets so your home equity will increase over time.
Our mortgage brokers are here to help. We can get you free property and suburb reports to help you decide which regional area is the best place to buy your first home. Call us on 1300 889 743 or enquire online today.