Is throwing money at a problem the answer in a regional city?
Host Bryce Holdaway provides his insight into the property market in a regional city - as seen in Episode 2.
Fab and Nick were leaving a thriving metropolis of Sydney to move to the Sunshine Coast which has been largely negatively affected by the GFC in terms of real estate and the job market. Fortunately for Fabrizia, she was offered a very attractive career promotion to move to the area so in terms of job security, they were quite secure in that department. With respect to property, they are making a huge financial decision to invest in this region so they need to be objective with what they buy and where.
So when Fab couldn’t find what she wanted she decided to get a higher finance approval from the bank but I cautioned them that this is not necessarily the right approach. Buying smart and not putting yourself under financial pressure was the key for this duo, especially given they are relocating, settling into new jobs, resettling socially and all in their first year of marriage… so it would be absolute madness to throw in financial pressure.
Buying in an area that is not supported by a capital city job market requires some caution:
· Don’t overcommit – Fab and Nick weren’t sure how long they would stay on the Sunshine Coast but they needed to be aware that capital growth could be patchy and resale times could be lengthy depending on the market conditions
· Susceptible to the local economy – areas that rely on tourism, retail and hospitality can be volatile as they don’t have the breadth and depth of job opportunities like you do in the capital cities. This can affect the value of your property as some properties haven’t grown much at all in the area since the GFC
· Champagne taste with a beer budget - be clear on what your money will actually get you. Fab and Nick thought they would get the Taj Mahal but were disappointed when they realised that they had to compromise and couldn’t actually afford what they thought they would get. They wanted a view and wow factor and there budget was about $200k short of what they really wanted
· Be careful to buy with the head not just the heart – Fab wanted a wow factor to impress her friends but this may have left them financially under pressure for the sake of an occasional visit from friends. Practicalities of daily living need to be prioritised.