It’s pretty hard to ignore all the value currently being pushed into areas outside Sydney and Melbourne. Here are four reasons why you should look into investing outside big cities.
Location, location, location.
I’m sure you know that’s what matters most in property. But the question is:
Which specific locations should you be putting your money in the next few years?
Well, there’s just no one correct answer to that question.
After all, the best place to buy varies from individual to individual. In fact, you could have six people in the room and there’ll be six different answers to that question, depending on factors. Like how old they are, how much they earn, and their risk profile, among others.
There are indeed some locations that are better suited for specific investing strategies. For some people, buying in places like Sydney and Melbourne makes more sense, for instance. And for others, it might not be such a good idea to do so.
Broadly speaking, however, it’s difficult to ignore just how much value is being pushed into areas outside these big cities of Sydney and Melbourne.
In this article, we’ll explore four reasons why property investors should look into investing outside big cities.
The 4 Reasons
Good investing opportunities currently exist outside big cities for the following reasons:
Reason #1 – More jobs and development projects are being pushed to regional areas
Big city centres are becoming denser and denser. That’s why more projects are being pushed to regional centres where there’s still room and resources to do bigger projects. These projects then drive more job opportunities.
On top of that, the reopening of borders is causing net overseas migration to rise again. And with more migrants coming into the country, they’re bound to seek out opportunities that exist in those regional areas.
With job seekers and development chasers come the demand for more properties.
Sure, there will always be cyclical shifts that will make Sydney and Melbourne exciting again in about four or five years. But right now, the main thrust of opportunity exists mostly outside of those areas.
Apart from jobs, big infrastructure projects and local events are hugely influential and impactful to the real estate industry.
In 2026, for instance, regional Victoria is set to host the Commonwealth Games. This will have a huge impact on property markets in the area over the next few years. After all, they’ll have to spend massively on infrastructure. They’ll also upgrade sports facilities, transport infrastructures, and other tourist areas, making the area more attractive for property investors.
Meanwhile, if you’re considering investing in regional Queensland, you’ve got the 2032 Olympics to look forward to.
Reason #2 – Properties outside big cities are still more affordable
Another fundamental principle that drives long-term growth in location is affordability. And areas like regional Queensland and regional NSW have been raking very high in terms of affordability.
Now, you could ask yourself:
If you have a choice between buying a $1M house in Sydney versus a $500,000 home in regional New South Wales for the same size and quality of property, which would you choose?
Well, more people would take the more affordable option. After all, they could then use the $500K they saved to live a better life.
So many parts of regional Australia have become more compelling places for people to buy because they could do so affordably. But it’s not just the actual property prices that are more affordable in areas outside big cities. It’s the lifestyle, too.
And speaking of lifestyle…
Reason #3 – Areas outside big cities present a better lifestyle
Contrary to popular misconceptions, the exodus due to a more affordable lifestyle has been the dominant trend even before the pandemic happened.
That means the internal migration to regional areas will not go in reverse even after the pandemic ends. It’s a trend that will continue because the pursuit of a more affordable lifestyle is a sensible trend. Not to mention it’s something that’s made more possible by technological advancements that allow people to work anywhere.
Reason #4 – More people are shifting to remote work
In the past, it made more sense for people to flock to big cities because those are where most job opportunities are.
It’s impractical to reside in a regional area, only to spend more on rent or transport costs. That’s why despite the better lifestyle that regional centres have to offer, many people settled in dense communities. The focus then was simply geared towards proximity to the workplace.
However, the silver lining of the whole pandemic situation is that it made businesses and employees realise that they don’t even have to be in a central office or headquarters to work productively. It’s also a lot cheaper to allow workers to do their work at home – and more people are making that choice.
So, even if a person can’t find a job outside big cities despite the strong developmental push in those areas, they always have the option to work remotely. All while benefiting from the better lifestyle and affordability these regional areas have to offer.
Needless to say, there’s a huge opportunity that property investors can take advantage of.
Start Exploring Opportunities Outside the Big Cities
There are indeed wonderful prospects to be found outside big cities. With jobs, affordability, and lifestyle all looking more attractive in regional areas, you are now staring at an opportunity to build a prolific property portfolio in these places.
Again, as mentioned earlier, the best location for you to invest in still depends on your individual circumstance. But seeing as the four factors mentioned above are generally applicable to investors from all walks of life, it might be worth a shot for you to start exploring investment opportunities outside big cities.
As long as you do your independent research on an area and you’re not entering markets that are not yet due for near-term developments, you should be able to cash in on areas that are bound to see growth in the next couple of years.
Keen to explore your own property strategy?