CASHED-UP Sydney investors are infiltrating the Tamworth housing market, seduced by cheap property and robust returns.
Shut out of the “buoyant” metropolitan market, greater numbers of Sydneysiders are turning to regional centres to invest their hard-earned cash.
Just last month, two Sydney construction companies snapped up 40 residential lots forming part of a new Kootingal subdivision to cater to the heightened demand.
The Professionals’ Stuart Watts, who oversaw the sale, said city dwellers were lured in the most part by positive returns.
“Strong regional centres are not generally negative geared. They usually offer a positive cash flow from day one,” Mr Watts said.
“From an investor’s point of view they may borrow money at 5 per cent and get about a 6 per cent return.
“Some parts of Tamworth can offer up to 7.5 to 8 per cent and at Coledale you can get around a 10 per cent return, which is unheard of in any coastal or urban-based market.
“Whether they put a tenant in or choose to live there themselves, the property represents a strong value.”
The realtor said a healthy rental market, coupled with Tamworth’s diverse economy, added to the appeal.
“They see our economy as diverse enough and that the area has enough critical mass as far as population growth goes for it to be a stable platform,” Mr Watts said.
“You won’t see the peaks and troughs that you see in the Sydney or Newcastle markets, nor some of the ramifications that go with it.”
Ideally, the 126-lot Fairview Estate situated off Denman Ave will consist of a mix of investors, first-home buyers and downsizing retirees, Mr Watts said.
“We are really going to limit the amount going to investors,” he said.
“Ideally, it would be one-third investors, one-third home buyers and one-third retirees.”
Construction of stage one is expected to begin in the second half of the year.