Ph: (02) 9370 56 64

Where to Buy - Country or City

On Dec 15 2013
Tagged as:
  • Investing


Deciding whether to buy in a city or in the country might sound simple, but it’s not quite as straightforward as it might appear. One way to easily sort through the noise, however, is to define the broader parameters for where you think you might like to invest. Choosing between a regional and metropolitan property strategy is one way to narrow your search.

Where to Buy - Country or City

Deciding whether to buy in a city or in the country might sound simple, but it’s not quite as straightforward as it might appear.

Where Should You Buy?

Finding the right location in which to invest can be a daunting prospect, and not just for the first time investor.

One way to easily sort through the noise, however, is to define the broader parameters for where you think you might like to invest. Choosing between a regional and metropolitan property strategy is one way to narrow your search.

Deciding between the two is an individual decision, based on the goals of your property investment strategy and the level of risk with which you are comfortable.

The price bracket within which you are able to enter the market is also a helpful indication, with Australian metropolitan house prices averaging $126,321 more than regional house prices nationwide, according to RP Data.

A Numbers Game

With 68.4 per cent of Australia’s population living in cities, investing in a metro area can be an easier bet. The three key questions you should ask are: Is there demand? Is there infrastructure? Is there accessibility to hospitals and the capital cities?

In capital cities, there are always a lot of people and therefore you will usually see a steady flow of tenants. The city’s more extensive employment opportunities are directly responsible for the greater demand for property in metropolitan areas and to some degree; this can translate into lower risk. The more diverse the economy, the lower the investment risk.

A clear majority of Australians residents in city areas; 19.4 per cent live in inner regional areas while a tiny 0.8 per cent live in very remote locations.

Ultimately, all markets carry risks but by researching the numbers and local services you can lessen the risk in any area.
 

The Broad Differences

If cash flow is what you want from your investment, purchasing in a country area could be a good move.

There are many benefits to buying in a regional area including; potentially, good cash flow from the word go, because of the cheaper purchase point and often higher yields. However, it is worth noting that regional properties can sometimes take longer than expected to become positive.

Mining is often the key attraction of regional areas for investors but those looking for a low risk alternative would be better suited to a town that is benefitting from the resources boom, but also supported by other industries, not just mining.

 Avoiding areas that rely on just one company or industry is an important principal of low-risk regional investment and investors should ensure that a stable and diverse economy exists before making any purchases.

There is no one size fits all answer to the metro versus regional debate and your selection will depend on many different variables. At the end of the day, it may be wisest to invest in a location you feel most comfortable with.

For further property investment insights and all the latest property market news visit www.spionline.com.au

Subscribe to our newsletter

Please enter your name
Please enter your valid Email Address
Please checked I Agree to Terms & Conditions and Privacy Policy
Please verify that you are not a robot.