The roaring regions: affordable havens for first-home buyers

According to the PRD Real Estate Roaring Regions Top 10 Affordable Regional Areas 2024 report, the Mackay LGA provides the best option for those looking to fulfill the great Australian dream of home ownership.

The Toowoomba, Townsville, Dubbo and Tamworth LGAs make up the top five. 

PRD Chief Economist Dr Diaswati Mardiasmo said As of the December quarter of 2023, housing affordability in NSW, Victoria, South Australia, Tasmania and the ACT were all at their lowest points in 20 years.

“In the past 12 months, to the December quarter of 2023, the weighted average capital city Australian median house price grew by 5.3 per cent to $1,005,242,” she said.

“We are officially a million-dollar country.

“The start of 2024 marks a new economic period in Australia, with the cash rate being held steady for the first time after a series of cash rate hikes. 

“This brought cautious hope for many in the industry, regardless of their property journey. 

“There is now evidence of a market recovery, which is mostly occurring in undersupplied areas, with no to very little new stock planned for construction

“With interest rates currently steady and demand growing, prices are gaining momentum.”

But Dr Mardiasmo said the Top 10 regional council areas in this year’s list offered hope to those looking for affordability.

All of the LGAs have a median house price of less than $600,000, which is higher than the $500,000 threshold for the 2023 report.

“That said the $600,000 highest threshold (among chosen LGAs) is approx. 27.3 oer cent lower than Brisbane’s, 33.9 per cent lower than Melbourne’s, 62.4 per cent less than Sydney’s and 18.9 per cent lower than Hobart’s median house prices in December quarter 2023; providing hope to first home buyers,” Dr Mardiasmo said.

Mackay, Queensland 

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Source: PRD Real Estate

The Mackay LGA, nestled in tropical north Queensland and known for its proximity to the Great Barrier Reef, experienced a 4.8 per cent population increase over the past five years up to 2021, aligning with expectations for regional growth. 

Anticipation for further population expansion is supported by substantial interstate migration and several commercial and infrastructure projects slated for 2024. 

As of the September quarter of 2023, the LGA boasted a 3.7 per cent unemployment rate, below the national average, indicating a robust local job market and economic health conducive to rising housing demand. 

Over the past decade, the Mackay LGA has seen a significant rise in property values, with land prices increasing by 9.6 per cent, and median prices for houses and units up by 8.9 per cent and 11.1 per cent, respectively, offering substantial capital growth for homeowners. 

The rental market in December 2023 reflected a strong performance, with house rental yields at 5.9 per cent and units at 5.3 per cent, coupled with a remarkably low vacancy rate of 0.3 per cent, suggesting a resilient rental sector despite economic pressures. 

With more than $1.7 billion in infrastructure and development projects commencing in 2024, and a current shortage in ready-to-sell stock due to construction delays, the Mackay LGA is poised for continued property market strength, presenting an opportune moment for investment.

Toowoomba, Queensland

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Source: PRD Real Estate

The Toowoomba LGA, situated west of Queensland, is renowned for its Victorian-era architecture, vibrant street art, lush gardens, and adjacent national parks. 

It saw a 15.8 per cent population increase, equating to 23,692 new residents, over the five years leading up to 2021. 

With an unemployment rate holding steady at 4 per cent as of the September quarter of 2023, Toowoomba’s stable job market is evidently drawing more residents, thereby boosting demand for housing. 

Property values in the Toowoomba LGA have risen sharply over the past decade, with houses, land, and units experiencing growth of 67.2 per cent, 57.1 per cent, and 33.8 per cent respectively, further spurred by a spike in property sales from 2020 to 2022 amid high interstate migration and advantageous conditions during the COVID-19 pandemic. 

Investors in December 2023 enjoyed robust rental yields of 5 per cent for houses and 4.9 per cent for units, alongside low vacancy rates of 0.7 per cent, indicating a quick turnover of investment properties and providing a lucrative alternative to the Brisbane market. 

Despite plans for $6.1 billion in development projects in 2024, Toowoomba faces ongoing housing undersupply issues due to construction delays, suggesting continued price increases and shifting buyer focus towards units.

Townsville, Queensland

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Source: PRD Real Estate

Over the past five years leading up to 2021, Townsville experienced a 3.2 per cent population growth, amounting to 6011 new residents, while maintaining a low unemployment rate of 2.5 per cent as of the September quarter of 2023, indicating a thriving job market. 

The property market in the Townsville LGA saw a significant increase over the last decade, with median prices for houses and land growing by 16.4 per cent and 7.3 per cent respectively, while unit prices dipped by 9.7 per cent. 

Despite a nationwide trend of fluctuating sales, Townsville’s property market remained stable, with median prices for houses, land, and units growing by 5 per cent, 7.7 per cent, and 1.8 per cent respectively in the last year up to 2023. 

With $3.2 billion worth of development projects set to commence in 2024, Townsville faces a continued undersupply in stand-alone houses due to construction delays, prompting a shift towards unit purchases and suggesting now as an opportune time for market entry. 

Dubbo, NSW

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Source: PRD Real Estate

With a significant population increase of 29.8 per cent over five years to 2021, and a projected annual growth of 1.02 per cent leading up to 2031, Dubbo’s thriving economy is driving up property demand. 

In the past decade, median house prices surged 76.7 per cent, while units climbed a huge 142.9 per cent. 

The peak in house sales from 2020 to 2022 resulted in a current market undersupply and an 11.6 per cent increase in median house prices over the past year. 

Investors have seen high rental returns, with average yields of 5.8 per cent for houses and 5.2 per cent for units as of December 2023, outperforming Sydney Metro’s returns. 

With $4.7 billion worth of development projects planned for 2024, addressing the continued housing undersupply, and with economic recovery on the horizon, Dubbo presents a compelling investment opportunity, especially compared to the more expensive Sydney Metro.

Tamworth, NSW

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Source: PRD Real Estate

Tamworth, located northeast of NSW and famous for its annual Country Music Festival, serves as the primary retail hub for the New England and Northwest Slopes regions. 

The city has witnessed a population increase of 5.7 per cent over the past five years to 2021, accompanied by a declining unemployment rate of 2 per cent as of the September quarter of 2023, indicating a growing local economy that is generating job opportunities. 

Over the past decade, property prices have seen remarkable growth: 73.8 per cent for houses, 72.1 per cent for land, and 54.2 per cent for units, with a spike in sales between 2020-2022 and a notable market undersupply in 2023. 

Investors enjoyed average rental yields of 4.7 per cent for houses in December 2023, surpassing those in Sydney Metro, despite a slight increase in vacancy rates to 1.8 per cent, suggesting quick property occupancy. 

Planned developments worth $112.4 million in 2024, including 251 lots and 64 units, are insufficient to meet demand, exacerbating the undersupply of stand-alone houses and escalating prices, making it a critical time for potential investors and buyers to enter the market.

For more information on the other Top 10 LGAs see the full report here.

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