Regional Aus

[locko24]

Interesting article..

http://www.theaustralian.com.au/news/executive-lifestyle/lets-not-leave-out-the-good-bits/story-fn6njxlr-1226113942257

I knew it!!!

 

[our obsession]

Interesting article..

http://www.theaustralian.com.au/news/executive-lifestyle/lets-not-leave-out-the-good-bits/story-fn6njxlr-1226113942257

I knew it!!!

Thanks very much Locko, yes, regional (Victorian) property investing has been good to me, also as I got to know various areas more in depth, (towns and the regional cities), meeting other investors, hearing their stories and wealth accumulation-it's all quite inspiring. Different folks, investing for different reasons, going about their own individual styles, sourcing/creating their own deals, yet it's like all our 'own paths' lead to the common denominator.

It's about a third of Victorians choosing/living in regional Vic too..and myself and other 'bush' investors have the fingers in: resi, commercial, industrial, and business pies.

I know I am appreciative of the opportunities it has provided me with.

 

[Belbo]

And I'd expect the regionals will increasingly average better than the capitals over time.

For a start we appear to be seeing the joyous combination of unemployment rising at the same time as interest rates are threatening to go up (leaving aside the possibility of an emergency pullback by the RBA if US/EU conditions collapse). This would most likely affect the capitals more than the resource-rich regionals.

Further, we might also be seeing more than a temporary fall in immigration (for populist political reasons contrary to rational economic thinking), even while workers are relocating from capitals to regionals to pursue better-paying jobs. That can't bode well for the main cities.

Finally, there's the issue of where additional housing and transport infrastructure can and will be built. There's not much serious money or political interest in solving this problem in the capitals, while in the regionals it's both viable and of urgent material interest to both government and big business. Expect crocodile tears for the capitals on that score too, as regionals get an ever increasing slice of both the public and private pie. (Yes, undersupply could then force up R/E prices and yeilds in capitals, but this assumes unchanging demand, which more properous regionals could for the reasons stated above be undoing.)

 

[wobbycarly]

Interesting article..

http://www.theaustralian.com.au/news/executive-lifestyle/lets-not-leave-out-the-good-bits/story-fn6njxlr-1226113942257

I knew it!!!

Don't want to rain on your parade, but this sort of article talking about "the regional market" is as broad and no more useful than talking about "the Australian market".

"Over the past decade, the country areas have out-grown their capital cities". Wow!! So buying ANYWHERE in "the country" has been better than a capital?

10 year growth figures from API July 2011:
Nhill 7.5%
Kerang 7.0%
Ashburton 11.5%
Blackburn 12.5%

Mount Gambier 8.4%
Glenside 11.2%

Goondiwindi 7.7%
Nudgee 13.3%

Of course, I've cherry picked, and certainly not having a crack at the OP, but this sort of article does not really do anyone any favours. I appreciate the sentiment ("don't forget to look outside the capitals") but other than this subtle message, the article is junk.

It's the old "markets within markets" discussion again - thought Ryder would do a better job.

 

[Belbo]

Don't want to rain on your parade, but this sort of article talking about "the regional market" is as broad and no more useful than talking about "the Australian market".

"Over the past decade, the country areas have out-grown their capital cities". Wow!! So buying ANYWHERE in "the country" has been better than a capital?

10 year growth figures from API July 2011:
Nhill 7.5%
Kerang 7.0%
Ashburton 11.5%
Blackburn 12.5%

Mount Gambier 8.4%
Glenside 11.2%

Goondiwindi 7.7%
Nudgee 13.3%

Of course, I've cherry picked, and certainly not having a crack at the OP, but this sort of article does not really do anyone any favours. I appreciate the sentiment ("don't forget to look outside the capitals") but other than this subtle message, the article is junk.

It's the old "markets within markets" discussion again - thought Ryder would do a better job.

Wobbycarly mate,

These things happen in 'short-order' journalism. Ryder hasn't given us a book here, just a condensced thought stream with a few illustrations. A proposition is suggested and a few key examples are trotted out, and any informed reflection suggests both counter-arguments and contrary examples, of course!

But there is a serious point here I'd still attest, and one Bernard Salt's article on 'muscle towns' (vis mining service centres) in the latest API strongly supports. The economic centre of gravity in Australia is devolving from capitals to regionals, and that may ultimately really have profound implications for property investors.

Of course, it doesn't mean that the game is over for city-based investing. You're entirely correct to point to the 'markets within markets' principle, precisely because there'll alwasy be great money to be made on well-chosen real estate in capitals. But Ryder didn't suggest any such absolute simplifications. He's no fool, as you properly observe.

What I think he is saying is that the 'easier' money looks to be on the economic move towards regional centres. I firmly agree with this. Moreover, I'm so lazy I'm putting my money on it!

Sure, these key regionals (like Port Hedland) are incredibly expensive and so very hard to break into, but you'd be equally hard-pressed to find anything offering 10+% yeilds with excellent CG potential near capitals these days, so they deserve deeper consideration than an unconvinced agnostic brush-off (apologies if you're religiously inclined, old chap).

More importantly, I see them as an overall hedge. Hedging is always risky, but not hedging can be equally so. Why not go for a mix of both capitals and regionals, and hedge your bets?

 

[topcropper]

Interesting article..

http://www.theaustralian.com.au/news/executive-lifestyle/lets-not-leave-out-the-good-bits/story-fn6njxlr-1226113942257

I knew it!!!

That article is great. And over 10 years it could very well be right. It's been good. And I wonder if it includes acreage/lifestyle/hobby farms? Probably not, and those have been spectacular.

I just think the 10 year time frame has included all the boom in regionals. And it's included all of the mining/commodities boom. In my area, everything took off in 2003, but before then it was terrible.

It's the 10 years time frame that makes it all true. If the article was based on a 15 year time frame, then Sydney and a lot of other places would do a lot better. It's still cool that all these dumpy places have faired better than the flash city places over 10 years.


See ya's.

 

[locko24]

My comment on the article was 'interesting article'.
I did not say, 'take this article as your new investing bible!'

Don't want to rain on your parade, but this sort of article talking about "the regional market" is as broad and no more useful than talking about "the Australian market".

"Over the past decade, the country areas have out-grown their capital cities". Wow!! So buying ANYWHERE in "the country" has been better than a capital?

10 year growth figures from API July 2011:
Nhill 7.5%
Kerang 7.0%
Ashburton 11.5%
Blackburn 12.5%

Mount Gambier 8.4%
Glenside 11.2%

Goondiwindi 7.7%
Nudgee 13.3%

Of course, I've cherry picked, and certainly not having a crack at the OP, but this sort of article does not really do anyone any favours. I appreciate the sentiment ("don't forget to look outside the capitals") but other than this subtle message, the article is junk.

It's the old "markets within markets" discussion again - thought Ryder would do a better job.

 

[wobbycarly]

My comment on the article was 'interesting article'.
I did not say, 'take this article as your new investing bible!'

Point taken and didn't mean to sound harsh - certainly not on yourself for posting.

@Belbo,
You make some very valid points - pity Ryder didn't qualify, as you have done, by using the terms "key regionals", "muscle towns" or "regional centres". Instead he talks about "country" and "the regions".

That's the criticism I was trying to draw, not the fact that some country and regional areas have outperformed some city suburbs.

 

[Belbo]

Point taken and didn't mean to sound harsh - certainly not on yourself for posting.

@Belbo,
You make some very valid points - pity Ryder didn't qualify, as you have done, by using the terms "key regionals", "muscle towns" or "regional centres". Instead he talks about "country" and "the regions".

That's the criticism I was trying to draw, not the fact that some country and regional areas have outperformed some city suburbs.

Fair enough, but I'd press the argument further by suggesting 'have outperformed' is still too agnostic a standpoint: I'm a bibilical believer in will outperform going forward too.

This is the gist of Ryder's and Salt's thinking (and so worthy of a full-blown knock-down intestine-tearing bust-up): The country looks set to outperform the capital cities hands down over the next decade or two - in residential - and perhaps commercial / industrial too.

(Mersault, I might be needing my Panzer before the picnic is out.)

 

[locko24]

That article is great. And over 10 years it could very well be right. It's been good. And I wonder if it includes acreage/lifestyle/hobby farms? Probably not, and those have been spectacular.

I just think the 10 year time frame has included all the boom in regionals. And it's included all of the mining/commodities boom. In my area, everything took off in 2003, but before then it was terrible.

It's the 10 years time frame that makes it all true. If the article was based on a 15 year time frame, then Sydney and a lot of other places would do a lot better. It's still cool that all these dumpy places have faired better than the flash city places over 10 years.


See ya's.

I've noticed around my area, acreages sell pretty quick. The only ones that don't are the ones really close to town. Much too expensive from a farming perspective, but as they are still classed as rural, (1a?) no good to subdivided either!

 

[our obsession]

He, (Ryder) actually makes excellent points:

WHEN media and analysts talk numbers in real estate, they're usually talking about our capital cities. There are a number of problems with that.
One issue is that focusing on data from the major cities ignores 40 per cent of the nation's house market.

Another is that it omits some of the best capital growth areas. So when economists and other half-informed analysts tell you real estate is flat or in decline, they're talking about the capital cities - and they're ignoring the areas where real estate is rising.

Of course, behind those generalised situations are all kinds of individual stand-out performances.

It's important to realise investing in property does not end at edge of metro areas, and growth once averaged out 'over time' is much of a muchness, apart from the little pockets of Gold by Sea.

Regional cities and bigger towns, (am referring to my backyard of Victoria only here), are great investing opportunities, just like anywhere, do your own diligence for your own needs and situation.

Great article.

The 'acreage' type farmlets here, continue to sell well, the little sodden, stony, mongrel soil 8 ha blocks, (no water, some with power), around peripherals of Bendigo do not sell for $40,000 to $50,000 anymore....those days of 2003/2004 long gone...