There’s been a lot of discussion about real estate in the media recently, but two experts say that’s no reason to avoid thinking about investing.
Chief economist at PRD Nationwide Dr Diaswati Mardiasmo used one word to describe Wagga Wagga’s real estate market – “resilient”.
“It is still a great place for investment, for sure.”
PRD Real Estate Wagga licensed real estate agent Ryan Smith said there were few rentals available in Wagga Wagga, meaning those looking to invest would enter a competitive market.
“Any investors that are coming, when they’re buying, are getting very, very strong yields at the moment,” he said.
Investors may get up to a 6 per cent return on their investment, Mr Smith said.
New investors should take into account the rental return, the condition of the property at purchase and if any work is necessary, the location and the price paid for it.
“Location is usually key – tenants want to live in nice places in nice parts of town,” he said.
The city offered a slightly cheaper ‘in price’ for would-be investors than Sydney’s $1.4 million as of the December 2022 quarter, as the median house price for Wagga Wagga came in at roughly $510, 000, Dr Mardiasmo said.
“Wagga Wagga wins, just for the sense that you can get in for half the price and you’re getting more growth on an annual and a ten-year comparison.”
But would-be investors should not be spooked by the thought of an already saturated market from people moving to regional areas in the past few years.
“The good news with Wagga Wagga is that, if you compare it to Sydney, the vacancy rate is still lower.”
Additionally, in the twelve months from December 2021 to December 2022, Wagga experienced 22.9 per cent growth, compared to “10 to 15 per cent growth” in Sydney.
Meanwhile, over the past decade, Wagga Wagga saw 72 per cent growth and Sydney, 40 per cent.
Wagga’s smaller size also gave it a slower pace of life and a “family-oriented feel” – but that didn’t mean an investor would be sacrificing creature comforts found in big cities.
“There’s still wine bars, there’s still nice restaurants, there’s still open spaces for kids to play around in – it’s all there, in terms of your lifestyle, in terms of what you need to be connected with the outside world and the international world,” she said.
Dr Mardiasmo said that Wagga’s real estate market was tied to its sense of self-sufficiency, when compared to more interconnected capital cities.
This meant, over the past three years, it had escaped some of the worst impacts of things like supply chain concerns and border closures.
“It has its own economy, it has its own people, it’s not reliant on international migration, it’s not reliant on international students.”
Mr Smith said this self-sufficiency aspect was due to factors outside the housing market that helped to make the city an attractive place to live.
“We’ve got incredibly strong employment and industry down here, with the RAAF base, the Kapooka army base, Charles Sturt University and then the hospital and we’ve got a very big agricultural belt around us.”
“That really holds property quite strongly.”
Amid uncertainty and financial stress around interest rates, Dr Mardiasmo said it was key that investors shopped around – or at least asked their bank about fixed and variable loans.
“You might be coming off your fixed rate [loan], which means that now is a great time to start looking around at the different banks as to what sort of variable rates that they might be offering.
“A lot of banks are offering bonus cashbacks or incentives to remortgage or refinance your current mortgage and that can be taken into consideration, as well.”
Mr Smith said those looking to invest shouldn’t be spooked by discussions of rising interest rates.
“Sensible buyers still buy when they’re ready; they don’t worry about what the interest rate is because the interest rate is always so fluid and changes.”