NARRABRI has confounded conventional real estate wisdom to be named one of the country’s best-performing investment hotspots.
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Investment analysts Propertyology recently finished a study of Australia’s 550 local government areas (LGAs) to determine which had enjoyed the best returns.
Despite recording zero population growth over the past 10 years, Narrabri investment property values had returned an average of 15 per cent a year, Propertyology found.
In fact, the latest figures from the Australian Bureau of Statistics showed the 2014 population of 13,764 people was actually 20 fewer than a decade earlier.
Propertyology managing director Simon Pressley said the result, which places Narrabri in the top 10 per cent of LGAs, challenged the “flawed” logic that population growth was essential to good returns.
He said a standard three-bedroom Narrabri home purchased in 2000 for about $96,000 was now worth in the order of $287,000, courtesy of an average 8.1 per cent a year growth rate.
When the current rental yield of 6.9 per cent is factored in, Mr Pressley said that produced an annual return of 15 per cent, far outstripping the performance of many high-population-growth metropolitan areas.
“Don’t get me wrong, population volume and population growth are considerations for selecting a sustainable location to invest in – an increase in population means higher demand for housing,” he said in an online explanatory note.
“However, if supply is equally matched through broad-acre land release and/or higher density, then price growth will be constrained.”
Narrabri and District Chamber of Commerce president Russell Stewart said the figures were “great news” for anyone savvy enough to have purchased property in the shire.
He said Narrabri’s strength was being driven by the agriculture industry’s willingness to “adapt and diversify”, despite the prevailing drought conditions.
“This is a terrific return in anyone’s language,” he said.
“The vast majority of rural shires in Australia similar to ours would be over the moon with this result.
“How fortunate we are in Narrabri shire: not only do we have the best agriculture industry in Australia, we also have much of NSW’s highly sought-after and valuable, quality coal and coal seam gas located within our boundaries.”
Mr Stewart did say that, when considering Narrabri’s lack of population growth over the past 10 years, it was important to remember the shire was, until recently, actually losing people.
“We should be extremely happy and encouraged that we have grown our way to stable,” he said.