Housing affordability has increased nationwide making house ownership more accessible to new home buyers. The latest housing finance figures released by the Australian Bureau of Statistics (ABS) confirmed that a lower level of household income is being spent on home loan repayments, and the news is particularly positive for regions in North West New South Wales.
Malcolm Gunning, president of the Real Estate Institute of Australia (REIA), has an interest in areas that are slightly off the radar. “My other hat is that of a farmer in the Upper Hunter,” he says. “I find that the towns that fare the best are the ones where people want to live because of their services, such as hospitals, schools, jobs and transport.”
Areas that fare positively in the report are places like Tamworth where fundamental services keep improving. “There are more lines, and even flights to Sydney now,” says Mr Gunning. He also points to Armidale as a developing district with good transport and a burgeoning fashion industry.
Inverell is slowly making its way onto the housing radar. “Grey nomads drifting through during their caravan drives are attracted to the area thanks to its beauty and services,” says Mr Gunning. “It is well-established.”
Currently experiencing a rental boom because of the wind farm, Mr Gunning says that it is still uncertain what will happen once the renewable energy works are completed. The wind farm will not impact the house buying market as much as rentals. Local authorities are advised to avoid the mistakes of mining towns in Queensland, such as Townsville and Longhampton. On the other hand, areas like Coffs Harbour are positive examples where construction lead to a number of engineers reaping the benefits of housing affordability in the area.
Regional areas that win out on the housing market are those that have something original to offer their visitors. Inverell obviously does in terms of its natural beauty, but there is room for improvement as far as the transport infrastructure is concerned. It is a winner as far as the job market is concerned, especially the sector linked to rural industry.
Gunnedah, Tamworth, Inverell and Glen Innes have done well thanks to their solid local economies, but there are also other peculiar areas entering the spotlight. “I visited Uralla and was blown away by what I saw,” says Mr Gunning. “It is an old town with semi-retired city people, and filled with art and shops offering local produce.” It is worth driving an hour just to get there.
The latest figures confirm that the actions by regulators and banks to dampen investor demand for property is working. “The value of investment housing commitments decreased by 1 percent in April in trend terms. This is down 2.3 percent from a year ago, in seasonally adjuster terms, and is well down from its 2015 peak,” says Mr Gunning.
“Overall the figures for April 2017 show, in trend terms that the number of owner-occupied finance commitments decreased by 0.5 percent. If refinancing is excluded, in trend terms, the number of owner-occupied finance commitments increased by 0.1 percent, following a rise of 0.2 percent in March,” he says.
Decreases were recorded in all states and territories except the Northern Territory which has an increase of 1.8 percent. Queensland and Western Australia had the largest decrease of 1 percent. The number of first home buyer commitments decreased by 17.5 percent after an increase in the previous month and is the lowest since January 2017.
“The April figures show that the market is adjusting,” says Mr Gunning. “We have seen this week the impact that a slow down in residential construction has on GDP and we will need to closely monitor the cumulative impact of recent actions by the regulators, banks and the Federal Budget,” he said.