"The old regions versus capital cities debate has been well and truly done to death – you just have to take your viewpoint and go with it."
New South Wales Queensland Western Australia Property News Residential Hotspots Observers Pete Wargent
Mining towns, for all their capital gains, are not worth the risk
It's no doubt hard work for real estate writers trying to think of something different to say several times per week. Last Thursday, Terry Ryder vented his spleen – again – about "lies and propaganda" from "vested interests" writing about property (vested interests being an unusual subject for an article signed off: Terry Ryder, founder of hotspotting.com.au).
The other day he was fuming about talk of a property bubble, and the day before that the lies about housing shortages and then it was something else or other, can't remember what.
Last week it was me in the firing line after quoting an article about Sydney's middle sector of the market being "the only sector" of the property market to be at all-time highs – see last Friday's further article in Sydney Morning Herald and another one in Property Observer here.
Ryder notes that among other regional areas, Karratha, Dubbo, Mudgee and Whyalla have recently shown growth.
Look, fair enough – if you want to get bogged down in semantics, I'll admit I do not consider the town of Mudgee (population 10,000) to be a "sector" of the property market; I suppose you could feasibly term it a sub-sector, though. Truth be told, I couldn't even tell you exactly what prices have done in Mudgee, though some pretty good growth in 2012 springs to mind (just looked it up, and it recorded 9% growth).
I'm probably one of the very few people to have actually travelled to all of the listed places in the last couple of years, and all I say is, if you're comfortable in these days of elevated household leverage investing in small towns and remote regional markets, then, truly, go for it.
APM reported last week that apartments in Sydney increased in median price by 5.6% last year, though obviously some sub-sectors of the market performed significantly better than others. Other capital cities such as Melbourne, Adelaide, Brisbane and Canberra were weak in 2012.
Personally, I invest in large and capital cities for the long term - the reasons for which I explained here with not much value in me reproducing – if you want to 'hotspot' (if that isn't unacceptable verbing of my adjectives) in Mount Isa, Wagga Wagga, the Pilbara or near wind farms off the coast of Tasmania, then, sincerely, best of luck to you.
The old regions versus capital cities debate has been well and truly done to death – you just have to take your viewpoint and go with it. I think the old phrase is: "let's agree to disagree".
Remember that property is best treated as a long-term investment, and long-term price growth ultimately has to be sourced from real and sustained wages growth. And also remember the concept of risk versus return. Let's just see wait and see what happens to regional markets in Australia the next time the economy shrinks.
Pete Wargent holds a range of finance and property qualifications and is the author of Get a Financial Grip – a simple plan for financial freedom.