Hobart and the Gold Coast property market are seeing new demand as people begin seeking bargains outside their states and building their property portfolios, according to a report by news.com.au.
An increasing number of Melbourne and Sydney residents have opted to rent instead of purchasing property in their expensive cities.
Data from realestate.com.au showed that more than 513,000 searches for homes outside of NSW in 2018 were centred on the areas within 30 kilometres of the Gold Coast. Nine of the top 20 interstate searches were suburbs near the seaside Queensland city.
Residents in Sydney, meanwhile, are looking north, while property seekers from Victoria are interested in locations across the Bass Strait.
Realestate.com.au Chief Economist Nerida Conisbee identified the trend as “rentvesting,” wherein buyers choose to pay rent and inject their funds into growing markets.
“The lower price point is a good thing because if you have a look at what you can buy in Hobart with a fairly low deposit compared to what you can buy in Melbourne, it does give you more home and a better location for your money,” she told news.com.au.
Conisbee also said that younger people, who may not be able to afford a deposit for a home in Melbourne, are inclined to buying houses outside Victoria’s capital.
The extreme costs of property in Sydney and Melbourne caused people to consider alternative ways to enter the market, and rentvesting is an ideal way to do that, according to Connisbee.
She also said that buyers are likely looking for a home rather than an investment since searches from more affordable regions such as South Australia and Queensland were dominated by areas just over the border.
Tim Lawless, CoreLogic head of research, agreed, noting that additional costs linked to owning property were overwhelming for residents in both Sydney and Melbourne.
“Purchasing outside of Sydney and Melbourne as an investor has been a worthwhile option for many buyers. It does highlight the affordability constraints that have become formidable barriers to participating in the Sydney and Melbourne housing markets,” he told news.com.au.