Young Australians looking to get into property are finding their only option is to buy in regional areas thousands of kilometers from where they live.
While it’s not exactly a desirable path (and few are likely to take the plunge), experts predict these buyers will reap the financial benefits for years to come.
It comes as first-home buyers continue to struggle to purchase property in capital cities, with the median house price in Sydney sitting at more than $1.6 million.
Sydney resident Poppy Whale, 21, was able to purchase her first property, a three-bedroom house valued at $386,000, by expanding her search to Geraldton, a regional coastal town with a population of 40,000 located 420 kilometers north of Perth.
Stephanie Cortis, 28, also from Sydney, took a similar path buying in Gracemere, a town of 11,000 people 9 kilometers west of Rockhampton, Queensland.
These two young women share a similar dream: to be financially secure and, hopefully, retire early.
Poppy Whale, 21, bought her first three-bedroom property for $386,000 in Geraldton, Western Australia, after realizing she couldn’t afford to buy it in Sydney.
Stephanie Cortis, 28, decided to expand her portfolio by investing in Gracemere, Queensland.
Poppy, a human resources associate, started looking at properties in February and quickly realized she couldn’t afford to buy in Sydney, so she started looking elsewhere.
With the help of a Compound Property agent, he ended up purchasing a 700 square meter property on the other side of the country, a four-hour drive from the nearest capital.
“I traveled a few years ago, but now I want to use my money wisely to benefit myself in the long term,” Poppy told FEMAIL.
The 21-year-old started working full-time eight months ago and has been saving since she started working a casual job at 14.
He managed to raise a deposit of $65,000 and knew he needed to use it wisely.
The ownership was settled earlier this month and Poppy is still figuring out that she is now the owner.
In just over 12 months, his property has increased in value by $101,000, having previously sold in January 2022 for $285,000.
Poppy bought her property (pictured) with a $65,000 deposit. In just over 12 months, the property’s price increased by $101,000 as it previously sold for $285,000 in January 2022.
Steph’s investment property (pictured) is positively geared and she couldn’t afford to buy it in Sydney either.
Steph bought her first three-bedroom property in western Sydney in 2019 while living at home, and bought her second in regional Queensland while renting.
Despite having two mortgages, he doesn’t feel the financial pressure and can still go on holiday abroad thanks to his six-figure income as a marketing manager and his positively oriented properties.
“Money is not an impediment. I still live my life and go out with friends, but I don’t spend much either,” he said.
‘I am very smart when it comes to shopping and I almost never pay full price for clothes. I only splurge on special occasions, like if I get a bonus at work.
Steph said she is happy to invest in rentals by living in Sydney’s eastern suburbs and buying elsewhere because she can live the lifestyle she enjoys and at the same time invest in property.
He also commented on the current state of Australia’s property market and the changing behavior of some buyers.
“I think it’s important to keep your focus on the ground and work with advisors to help you get ahead rather than wallowing in the fact that you can’t afford certain cities like Sydney,” he said.
‘I’ve even spoken to friends who are thinking about investing abroad.
‘There is a great tendency to stop buying a property to live in and, instead, have investments behind. Gone are the days when our parents bought huge properties and worked to pay for them.
“Now many people are diversifying their portfolio to leverage their money over time.”
Poppy and Steph are examples of young Australians who have decided to invest in regional areas of the country to access the real estate sector.
Steph said: ‘There is a big step towards buying a property to live in and instead having investments behind you. I’ve even spoken to friends who are thinking about investing abroad.
Compound Property buyer’s agent Ben Carrington told FEMAIL there are a few reasons why Australian buyers are moving away from cities.
‘I think there is now more awareness about the opportunity to invest outside of where you live. “Technology, podcasts, education and data available have made it much easier to research and shop interstate,” he said.
“As our major capital cities have risen in value to somewhat unaffordable levels, it has also forced many young investors to look at different regions that offer much more affordable options with typically better cash flow and good growth potential.”
Carrington referred to rising property prices in regional areas.
“Investing in more affordable regional areas offers investors the opportunity to enter the property market and start building their portfolio,” he said.
“For those that have done so, in recent years there has been significant capital growth and with the low vacancy rates we have also seen a large increase in rentals and we expect that trend to continue.”
He said investors are currently most interested in Queensland, Western Australia and South Australia.
And while all hope is not lost for those hoping to buy in Sydney or Melbourne, Carrington warned that it is “definitely getting a lot more difficult” in those cities.
‘It was recently reported that a couple would need to earn $293,578 to afford a mortgage on the median house price in Sydney. “Melbourne was less, $189,962, but that’s still a big income and doesn’t include the deposit amount needed to save,” she said.
“That said, one of our clients’ most common goals is to buy their dream home in Sydney or Melbourne and they use the ‘rentvesting’ strategy to achieve this.”
