Regional Australia's Property Boom: Prices Soar Amid Investor Demand

Regional Australian residential property prices have increased by nearly 60% over the past five years, reaching a median value of almost $700,000. In regional South Australia, property values have almost doubled to just under $500,000 within the same period.

This significant trend originated with the COVID-19 pandemic, as many individuals relocated from major cities to regional areas. While some buyers sought new residences, a substantial portion of the increased demand is attributed to investors.

Investor Impact Drives Competition

Investors are increasingly considering regional properties as valuable investments, primarily due to potentially higher returns compared to major metropolitan areas.

For example, a $500,000 property in Mount Gambier might yield $550 per week in rent, compared to a $1 million property in Adelaide or Melbourne renting for $700 per week.

This attractive return has fostered a national investment market. Some investors are even purchasing properties online without physical inspection, a practice that became common during the pandemic.

The surge in investor demand has resulted in heightened competition for first-home buyers. One former Mount Gambier resident described the challenge of competing directly with investors when attempting to purchase her first home.

Consequences and Solutions for Housing Security

While the current market trend has undoubtedly benefited sellers, it has also led to several negative outcomes for regional communities.

Many individuals are now experiencing severe housing insecurity, often needing to secure temporary accommodation in places like caravan parks or even tents. This challenging situation may also hinder regional growth by causing a shortage of available workers due to housing challenges.

Experts suggest that government investment in infrastructure is crucial to increase housing supply. Additionally, training programs are needed to develop a skilled workforce for new home construction.

These proactive steps are considered necessary to address the current pressing housing market issues and ensure sustainable regional development.