Well, that's my prediction anyway.
Be interested to hear if you agree or disagree and why.
Obviously "regional property" is a fairly broad term so I'll narrow it down to regional NSW which is where I invest. Of course there are always markets within markets and there may be a few mining towns that could be exceptions but in general I think regional is headed for a prolonged period of stagnation at best.
My prediction is based solely on the law of averages. Most regional towns and cities have outperformed the average Sydney suburb over the last 10 years due to the time lag between regional and metro cycles. Although not familiar with the Sydney market I believe it peaked in about 2003. The upswing in regional NSW was just starting to get going then and in the areas that I study the growth has continued until Dec 2009 with only a couple of short "breathers" along the way.
Prices in many regional areas have tripled in this time.
Now, assuming that-
1. The sydney market outperforms regional over the long term.
and
2. House prices double every 7-10 years.
By the law of averages regional should be in for a long period of zero growth or a falling market to bring everything back into line.
That's unless the world HAS changed and things really ARE different this time!
I think us regionals are going to be waiting a very long time for the next ripple to reach us, which is why I've just finished a sell down of regional property to hopefully put the money to better use elsewhere.
Interested to hear your thoughts.
Don't be afraid to tell me I'm an idiot!
RC
Be interested to hear if you agree or disagree and why.
Obviously "regional property" is a fairly broad term so I'll narrow it down to regional NSW which is where I invest. Of course there are always markets within markets and there may be a few mining towns that could be exceptions but in general I think regional is headed for a prolonged period of stagnation at best.
My prediction is based solely on the law of averages. Most regional towns and cities have outperformed the average Sydney suburb over the last 10 years due to the time lag between regional and metro cycles. Although not familiar with the Sydney market I believe it peaked in about 2003. The upswing in regional NSW was just starting to get going then and in the areas that I study the growth has continued until Dec 2009 with only a couple of short "breathers" along the way.
Prices in many regional areas have tripled in this time.
Now, assuming that-
1. The sydney market outperforms regional over the long term.
and
2. House prices double every 7-10 years.
By the law of averages regional should be in for a long period of zero growth or a falling market to bring everything back into line.
That's unless the world HAS changed and things really ARE different this time!
I think us regionals are going to be waiting a very long time for the next ripple to reach us, which is why I've just finished a sell down of regional property to hopefully put the money to better use elsewhere.
Interested to hear your thoughts.
Don't be afraid to tell me I'm an idiot!
RC