The Mornington Peninsula in Victoria has topped the list of the 10 best regional areas in Australia for capital growth, according to RiskWise Property Research.
The research house compiled the list of the Top 10 Regional Areas for both houses and units across Australia with Melbourne’s western suburbs coming in second.
Victoria featured strongly on the list with capital growth for houses over the past 12 months sitting at a strong 18.4 per cent for the Mornington Peninsula.
Melbourne’s West (16.9%), Inner South (12.3%), North East (13.9%), North West (14.6%) and Outer East (15.1%) were also identified as solid capital growth areas. Other areas that made the list are the ACT (15.6%) and NSW’s Central Coast (12.4%), Southern Highlands & Shoalhaven (15.4%) and Illawarra (12.1%).
Unsurprisingly, all regional areas in Queensland, Western Australian and the Northern Territory failed to make the grade due to their low-performing economies.
86 regional Statistical Areas 4 (i.e. SA4s), as per the Australian Bureau of Statistics, were assessed for capital growth in for the past 12 months.
Houses in Victoria were the ultimate winners, with six regional areas in the Top 10 for houses, with the clear majority within the Melbourne metro area.
These areas in Victoria have shown solid auction results, strong population growth (in fact, the highest in Australia due to exceptional overseas and interstate migration) and good economic growth with a strong gross state product growth rate of 3.3 per cent and increasing private capital expenditure.
All this means is that houses in Melbourne are likely to continue having sustained demand, particularly in the middle suburban rings and affordable areas with good access to Melbourne CBD, such as the Western Suburbs.
Also, while units in four areas in Greater Melbourne performed “very well” making it into the Top 10, overall, units in Melbourne carried a higher level of risk than houses, particularly when purchased off-the-plan and / or in suburbs that experienced a strong supply of dwellings.
Therefore, buyers should proceed with caution.
It was unsurprising that overall NSW and Victoria had performed so well, and that only one of the SA4 Top 10 areas for houses was in the ACT.
What is surprising though is that all the areas in NSW, besides the Northern Beaches and the Central Coast, are not within Greater Sydney.
Even the Central Coast is not really in the Sydney metro area.
This means that regional areas in NSW and VIC, and particularly those with reasonable proximity to the very unaffordable Sydney market, enjoy very strong capital growth.
It’s also worth noting that Hobart was very close to making it on both the lists for houses and units thanks to its strong performance and despite the economic growth in Tasmania being the second lowest in Australia, and the median weekly wage and wage growth being the lowest.
He said only high-performing economies made it on the list and therefore Western Australia, Queensland, South Australia and the Northern Territory did not feature.
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