Country real estate still offers best returns

Yesterday in NSW rental yields by LGA - June quarter 2011, I provided some data on rental yields in NSW. Today, the Sydney Morning Herald carried a story suggesting that Australian house prices continued to decline.

In any in investment house, the final return depends upon the combination of rental yield with capital gain. The higher the rental yield, the lower the capital gain required, the more secure the investment. In those days when I was buying investment houses I did okay because i bought in the country with a starting high gross rental yield by metro standards.

If you look at the rental yields for NSW in yesterday's post, you can see how low Sydney yields are even with recent rent rises. That is one reason why house prices themselves are in trouble.

If you look at country yields, you ace that country yields are higher. The best country returns have passed; in many areas, prices are up. You should have bought two years ago. Still, in comparison with Sydney gross yields remain better, capital gain prospects at least as good.

It remains true: go country if  you want to make money.     

NSW rental yields by LGA - June quarter 2011

I have remarked before about the way in which investment in regional real estate can provide good returns relative to the city alternative.

The Sydney Morning Herald had an interesting story, Country towns lead the way on rent increases. The following graphic shows increases in rentals for selected NSW LGAs for for houses for the June quarter 2011. The column that I was especially interested in was the one on the far right showing gross rental yields. You can see the range, with highest yields generally to be found in regional areas.

Equivalent figures for units can be found here.

 

 

Gordon Smith's outback adventure

It may sound dumb, but for someone who lived for so long in Armidale I rarely ventured north into inland Queensland. Our focus tended to be east and south, partly because the coast was a place for holidays, partly because state boundaries dictated that so much official business had to be carried out in Sydney.

My father was different. After he retired, he packed Mum into the car with his camera and went exploring. At first his focus was on New England, but then extended to inland Queensland.

There is some fantastic country there. I mention this because Gordon Smith whose lookANDsee photo blog is one of my all time favourites has taken his car and camera and headed west and north from Armidale on one of his regular outback tours. Just at the moment he is in the Carnarvon National Park.

The caption on this photo reads: 

This view seems to come from the land that time forgot. Can’t you almost spot the dinosaurs about to push out from between the trees?

You can see what Gordon means.

There are some wonderful photos. If you want to follow Gordon's trip, click on Outback 2011.

Demand for lamb rockets

I don't know about you, but I have almost given up buying lamb. A leg is just so expensive now.

Interesting story in the Country Leader (sadly not on-line) about the changing nature of the sheep industry. The combination of drought and low wool prices has led to a dramatic fall in sheep numbers from 130 million in 1994/95 to around 67.7 million today. This is a one hundred year low.

Now both wool and sheep meat prices are up, producers face a real dilemma in terms of keeping sheep for breeding and wool or to sell their lambs for the meat trade.

Global demand for lamb continues to increase. In the circumstances, I fear that lamb is going to continue to be a luxury so far as most of us are concerned.   

Sydney barrister tree-changes to Glen Innes

I see from the Armidale Express that senior Sydney silk Chris Leahy has decided to tree change to Glen Innes.

For those who don't know Glen Innes, it is a historic town on the New England Tablelands with a population of about 6,000.

Chris had worked as a barrister for more than thirty years, ten as a senior counsel, and then he and wife Margaret decided that it was time for a change.

The change means that Chis will be working as a solicitor rather than barrister, but it gives them a chance to find a new life style without Sydney pressures. I quote from Peter Barrett's story:

Mr Leahy ... has ‘absolutely no plans for retirement’.

Indeed, he is looking forward to the challenging but interesting wider range of work in a country practice than he has been used to as a barrister.

The couple will eventually buy a property in Glen Innes but are currently leasing - a lovely old home 3km out of town on about 10 acres’.

While only in the town for two weeks, the Leahys are enthusiastic about what they have seen and are happy with the move.

“It’s the little things we have found pleasing,” Mr Leahy said.

“People are incredibly welcoming, and things like driving to work - no traffic, no traffic lights, it takes just minutes to get a park.

“And we have the impression that the important facilities are well covered, we’re pretty well looked after.”

I have commented before on this blog about the way in which Regional Australia offers professionals of all types new opportunities.  

Art Deco Albury

One of the things that I love about regional Australia are the variations in architecture. This photo shows the art deco T&G building in Albury.  

Of course you will find this in the metro centres. You will find everything there with some concentrations, but the variations tend to be a little less obvious.

A year or so back, we stayed in Albury on our way through to Christmas at Mt Hotham. I was quite struck by Albury's art deco style.

I was reminded of this by a number of posts on the Australian blog Art Deco Buildings. The posts were in order:

• Albury Delightfully Deco Exhibition
• T&G Building, Albury
• A House in Albury

Albury is starting to make a real feature of its art deco style. I think that's a very good thing.

Moree - live the lifestyle

I have often remarked about the variety of regional life styles. As this YouTube video says, Moree may not be Paris, but it has its own unique style!

For those who don't know Moree, it is situated in northwest New England 640 kilometers from Sydney and 480 kilometers from Brisbane. Moree has an enthusiastic supportive friendly caring community with a great lifestyle and many great sporting opportunities.

The black alluvial soils of the Gwydir Valley are some of the richest in the southern hemisphere. Moree Plains Shire is the most productive agricultural shire in Australia. Major agricultural industries are cotton, beef cattle, pecan-nuts, olives, wheat, sheep wool, cereal crops.

Moree is famous for its Hot Mineral Baths which originated in 1895. The baths were discovered accidentally when searching for irrigation water. These mercurial waters are from bores sunk into our amazing great Artesian Basin. 300,000 visitors of all ages visit annually. Many believe in the healing powers of the Artesian mineral waters. There are two large hot pools with temperatures ranging from 39 to 41 degrees, A 50 meter 6 lane Olympic Pool, a Junior Pool and a Toddlers pool.

Enjoy.