Property Boom: Regional real estate a boon for investors and a bane for local buyers

As interstate buyers continue to push up the house prices and rents, experts say this city’s residents will struggle to hold onto their homes.

House and rental prices have continued to climb in regional South Australia and while it is great news for investors — first home buyers and renters are feeling the pinch.

Data released by Core Logic shows regional South Australia has been outperforming other state rural markets in sales volume, median value and rental yield over the last 12 months.

Mount Gambier, South Australia’s second largest city, has seen a massive increase over the last 12 months and within the last quarter.

Property and rental prices continue to climb. Picture: FilePicture: Richard Walker

Since January the cost of renting a unit in Mount Gambier has increased by 4.7 per cent, while house rental prices has increased by 7 per cent.

This time last year renters were paying roughly $30 a week less for a house or unit.

Increased prices has further strained Mount Gambier’s ongoing rental crisis with low income earners struggling to find an affordable places to stay.

In April, the Mount Gambier News spoke to Jodie Redman who was desperately looking for a roof to put over her family’s head.

“You roll up to a house for an inspection, you get 30 other people and you ‘think what is the point of this? I’m only going to get knocked back’,” she said.

“Honestly, I’d be happy living in a storage shed at the moment.”

According to data from property investment group Real Estate Investar, Mount Gambier’s vacancy rate is 0.25 per cent.

Chief executive officer Shane Maddocks. Picture: Supplied

Ac.care chief executive officer Shane Maddocks said the lack of available housing, increasing property and rental prices was pushing more people towards homelessness.

“An increasing number of individuals and some families (are) taking up the option of caravan parks, tents and other short-term accommodation,” he said.

“Which is not suitable long-term, especially heading into winter conditions.”

More funding into social welfare schemes and public housing was needed to combat the issue Mr Maddocks said.

“Declaration of Code Blue arrangements by the State Government during cold conditions has helped us accommodate more people in motels and other emergency accommodation for short periods,” he said.

“But we need longer term solutions, including an increase to JobSeeker and rent assistance to lift people out of poverty and more investment in community and public housing.”

Mount Gambier real estate agent Bianca Taylor said interstate buyers with “deeper pockets” were driving the price surge.

“Those coming from interstate they are the ones who are coming with a little bit bigger budget,” Ms Taylor said.

“We’ve hit a level of price for property where I feel we should have been five years ago.

“Unfortunately, instead of slowly increasing over those five years, it’s just gone bang — and increased over the last 18 months to two years.”

Ms Taylor said until demand for housing stabilised, prices would continue to rapidly grow.