Can’t buy in Sydney? There’s better alternatives out there.

Gen Y and gen Xers know this better than any other generation.

A finder.com.au survey of 1117 people in May found that 13 per cent of Aussie property hunters are looking to buy outside of their capital city.

A separate Finder survey in June also revealed that 72 per cent of first home buyers fear they won’t be able to afford their dream location, while 54 per cent of buyers fear they will buy in the wrong location.

Furthermore, the proportion of first homebuyer loans nationally so far in 2016 is at 14.49 per cent; this is the lowest since 2003. New South Wales has the lowest proportion of first home buyers when compared to all the states and territories at 11.1 per cent.

THINK FARTHER AFIELD

How’s this Byron Bay sunrise for serenity?Source:istock

The statistics are gloomy, but there is reason to be optimistic.

Seasoned investor Margaret Lomas, of Destiny Financial Solutions, has built a successful portfolio of some 40 properties across a mixture of city and regional areas.

“Capital cities aren’t exclusively the best place to buy,” Ms Lomas said.

“Just because you buy in a city doesn’t mean you get better growth and rental yield than you do when you buy outside of a city.”

An area will grow in relation to specific fundamentals, according to Ms Lomas, and these are not always confined to capital cities.

“They include a population growing faster than the national average, with a predominance of families, a diverse economy offering a broad spectrum of employment opportunities, and a local government which is supporting the growing population with suitable infrastructure and lifestyle amenities,” she said.

“We often see these fundamentals in some of our larger regional areas which have become fully self-sufficient.”

WHERE TO LOOK

Brisbane is a great alternative because the property is ‘undervalued’.Source:istock

Investor Nathan Birch buys a lot of properties in southeast Queensland — specifically Brisbane and the Gold Coast — because they are undervalued.

“There is a difference between areas that are cheap compared with areas that are undervalued,” he said.

“Brisbane and the Gold Coast are what I consider to be undervalued. The rate of growth in those areas is faster than Sydney and Melbourne and I think people will look back in 10 years and regret not buying in those areas.”

He also recommended looking to the Central Coast for those Sydneysiders priced out of the inner city.

Elders Lennox Head principal Michael King said improved lifestyle and economic conditions meant a growing number of young couples and families were choosing to invest in the Northern Rivers region of NSW.

“The Lennox-Ballina region has always had a price point advantage over neighbouring Byron Bay and the Tweed and Gold Coasts, and young people are recognising that it makes sense to stay and take advantage of the growth the region is experiencing,” he said.

He added that major road upgrades in the area had made the region more attractive to young people.

VALUE FOR MONEY

Cooby Dam, in the region of Toowoomba, Queensland. Toombooma’s diversifying economy is a hit with the property market.Source:istock

Managing Director of Johnson Real Estate, Andrew Trim, owns two investment properties in Ipswich, southwest of Brisbane, and thinks it is a hugely undervalued area.

“There are plenty of properties under the $250,000 mark, and often they are on good-sized blocks,” he said.

“Most of Ipswich also sits within 40km of Brisbane CBD, which allows for easy commuting distance for those who work in the city.”

Ms Lomas is a big fan of Toowoomba, which “continues to offer, great buying due to its diversifying economy.”

“Sunbury offers Melbourne residents a rural setting within a commutable distance back into the city,” she added.

“The Central Coast is an excellent example. At a median price considerably less than, say Penrith, the commute to Sydney via a reliable train service is similar to Penrith, and yet lifestyle factors abound on the Central Coast.”

DON’T BOTHER?

Albury is popular not just for its attractive property prices, but its historic attractions including its old historic railway station.Source:istock

Property experts and investors who stick to the inner city suburbs put off many first homebuyers from buying regionally.

One of them is Zaki Ameer from Dream Design Property.

“Regional and coastal towns have little to no growth in property values, little employment opportunities, slow population growth and high vacancy rates,” he said.

However Mr Ameer would suggest purchasing on the Central Coast, Wagga Wagga or Albury, but only “if it’s 3km from the CBD to ensure demand for properties for capital growth and rental demand”.

Spokeswoman for comparison site Finder.com.au Bessie Hassan agreed regional areas needed to be carefully vetted.

She advised homebuyers to look for infrastructure and capital works projects in the area; a flourishing tourism sector; a vibrant town centre; a population greater than 100,000; low vacancy rates and proximity to a major city

Mr Birch is also scrupulous about where he buys outside of capital cities, and avoids crash-and burn mining regions and one-pub towns.

“If it doesn’t have a Bunnings or a Maccas, then I don’t go near it,” he said.

— Follow Johanna Leggatt on Twitter @johannaleggatt