NSW real estate: 30 best regional suburbs to invest in 2021

Booming demand for property in ­regional NSW is set to continue as property investors cash in on rising prices. Here’s the top 30 suburbs outside of Sydney you should be targeting.

Demand for property in ­regional NSW is set to continue after the pandemic and there are many pockets where property investors can cash in on rising prices and enjoy good returns.

An analysis by Real­estate.com.au has revealed that nearly 20 of the best 50 areas for investors in Australia are located in regional NSW.

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The bulk of the suburbs ­listed among the top regional NSW locations were mostly towns away from the coast and included several clusters.

Mitch and Nicole Morris with their sons Jax (left) and Brock have sold their Dubbo investment property to help fund a move from Sydney to Coffs Harbour. Picture: Heidi Bell/Heidi Bell Photography.

One of these clusters stretched from Bathurst to Dubbo and included Orange, Mudgee and Forbes. Property investors looking south of Sydney should to look to Goulburn, Nowra, North Albury and Moama on the Victorian border.

Tweed Heads, Banora Point and Murwillumbah in Northern Rivers were also safe bets for investors.

Many of these areas were identified as having larger sales volumes and rising ­demand from tenants, while prices had a long track record of growth.

They also had higher rental yields, signalling it was easier to find properties where the rents covered most, if not all, of investors’ mortgage costs.

Realestate.com.au economist Paul Ryan said the suburbs identified as the best for investors had a history of strong growth in prices over many years, as well as broad appeal among homebuyers and tenants, usually a result of good transport, lifestyle elements and large houses at lower prices.

“The best regional areas for investors have creature comfort stores. They have their own economic gravity, they are not just driven by one ­industry like tourism,” he said.

The economist added investing in regional properties offered multiple advantages including higher rental yields than in capital cities and lower entry price points.

“Regional prices have also outperformed capitals over the past year. Part of that is from more people moving out to ­regional areas during the pandemic,” Mr Ryan said.

Regional NSW’s median dwelling price, based on sales of units, houses and townhouses, jumped 2 per cent over July to about $600,000. This has taken the annual growth to 23 per cent or $130,000 pricier than last year. It also exceeded the 18.2 per cent jump in dwelling values seen in Sydney.

House buyers should be targeting areas like North Albury.

Many of the forces that helped drive prices up over the past year remain unchanged including demand from buyers looking to leave the cities for the regions, low interest rates and a lack of homes.

Hotspotting.com.au director Terry Ryder said the long-term outlook favoured regional centres as remote working allows people to seek a better lifestyle outside the cities. He added investors looking to buy regional should stick to places with a diverse economy like Orange, which had a strong public service, gold mining and agriculture.

“A diversified economy will ensure that if one sector has a downturn then the other ­industries can keep demand ticking,” he said.

Mr Ryder said investors looking to buy in property under $500,000 were almost always better off sticking to the regionals due to the ­quality of homes on offer.

“You could finding yourself buying two quality properties in ­regional NSW that will deliver strong growth and good yields for the price of one in Sydney,” he said.

“Sydney just doesn’t offer many good options at those lower price points.”

Ray White Dubbo director Richard Tegart said rising house prices in Sydney had seen an up tick in mum and dad investors looking to use the ­equity in their homes to buy property in towns like Dubbo. He said regional markets like Dubbo had not only seen prices surge, but had rental markets that favoured investors.

Tweed Heads was a good pick for apartment investors.

“We are getting 12 to 14 ­applications on any given ­rental property because there is a lack of investment properties,” he said. “It is not uncommon for renters to be well above the advertised in hope of securing a rental.”

Mr Tegart had been listed to sell the investment property of Nicole and Mitch Morris.

Ms Morris said buying in Dubbo got them a good house for significantly less than what it would cost it Sydney.

“Tenants are a lot more ­stable than what we found in Sydney, and our house was positively geared the entire time, which generated good cash flow,” she said.