Top five growth regions of NSW for first homebuyers
Stamp duty reform has made it possible for first homebuyers to enter the market for less – but these suburbs offer far more than an attractive entry price.
A handful of suburbs in Sydney’s west and southwest have been tipped as being solid opportunities for first home buyers wanting to avoid paying stamp duty.
Campbelltown, Liverpool, Bankstown, Penrith, Blacktown and Badgerys Creek surrounds made the list of top NSW regions seen to offer good growth, a thriving economy and a pipeline of job opportunities.
Other regions to make the list offered by InvestorKit include Tamworth, Wagga Wagga, Central Coast and Coffs Harbour.
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InvestorKit founder and head of research Arjun Paliwal said affordability was a key driver for first home buyers looking to crack the market but there were a range of other factors that should be considered.
“As a first homebuyer, you want to look for markets that are affordable, have housing supply shortages which will lead to capital growth, in addition to offering a great lifestyle and infrastructure pipeline, as this combination demonstrates growth potential,” Mr Paliwal said.
“Many will also want a low-cost and idyllic lifestyle which often comes with being in proximity to the major city or having a coastal backdrop, and those planning to reside in these areas will also expect strong job opportunities.
“The areas I’ve highlighted tick one or multiple of these characteristics which makes for a strong long-term purchase.”
He said the state government’s First Home Buyer Choice scheme had the potential to drive up property prices $250,000-$300,000 in the years ahead due to the demand it would generate for those electing to pay an annual land tax in place of stamp duty.
“For too long, an upfront stamp duty has been the barrier for entry for home ownership,” he said.
“The average property price in NSW is $1.1 million which would see an outlay of $46,000 in stamp duty. But this new option for first-home buyers will bring forward their home ownership dreams by two to four years.”
While Sydney’s west and southwest has relatively affordable housing compared with other parts of the city, the construction of Western Sydney Airport is expected to create 25,000 new jobs over the next 10 years, contributing to its long term growth, Mr Paliwal said.
“Surrounding this are the waves of business park projects and key transport infrastructure,” he said.
“Job creation and a strong local economy, which is forecasted for the next decade, are all key parts of a high-growth residential market.”
“First-home buyers will be pleased to hear there have been some price declines in the market in recent years, giving them an opportunity to buy at below peak pricing, setting them up for long-term growth.”
The regional areas listed each had medians well below the First Home Buyer Choice cap of $1.5m as well as a range of amenities and recent price growth.
Tamworth in the New England region saw recent price growth of 18 per cent, bringing its median to $469,000. It also has an undersupplied pipeline of future builds and $3.8 billion worth of infrastructure projects to commence in the near future.
On the Mid North Coast, Coffs Harbour was considered one of the top performing markets during the Covid boom.
“With a median house price of $815,000, Coffs Harbour provides homeowners a well-priced lifestyle, and in recent years, the local foodie scene has also emerged with great restaurants, cafes, wineries and breweries,” he said.
Wagga Wagga in the Riverina region had about 20 per cent price growth in 2022 yet remained relatively affordable with a median house price of $500,000.
He said its tight rental market meant if first homebuyers wanted to relocate there for a couple of years it could be a good investment over time.
“First home buyers are already becoming active in the market due to very low rental supply levels. Wagga Wagga has one of the tightest rental markets in the country, sitting at below 0.5 per cent,” he said.
He said the Central Coast remained an attractive option for those priced out of Sydney’s coastal suburbs.
“While properties in the area are at a slightly higher price point, with median house prices over $900,000, the price caps of the new legislation mean a lot of suburbs in the Central Coast will get you a house with yard space, as opposed to a small apartment in Bondi,” he said.
“If you’re in the fortunate position to have a higher borrowing capacity, buyers will be pleased to know they can score prices below the peak values of 2022 due to recent price declines in the area.”
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Originally published as Top five growth regions of NSW for first homebuyers
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