Australia’s focus on renewable energy will see a number of regional property markets across the east coast benefit from rising prices and long-term capital growth.
The top regions to ride the renewable energy boom include Rockhampton, Toowoomba, Tamworth-Armidale, Dubbo, and Latrobe Valley, according to new analysis.
Head of Research and founder of InvestorKit, Arjun Paliwal, said multiple regional economies and property markets would see flow-on effects during the construction phase and also in the long run.
“Each renewable energy project creates hundreds, and even thousands, of jobs, particularly in its construction phase,” Mr Paliwal said.
“This will see increased demand for housing in regional areas, a revitalisation of regional surrounding towns as new ‘locals’ bring money to hospitality and retail businesses, and an overall strengthening of its property market.
“Those looking to buy in areas where the renewable energy boom is earmarked to take place can see property prices rise and benefit from long-term capital growth.”
Mr Paliwal said Toowoomba in Queensland is well positioned to capitalise on the early stages of a potential boom.
“Toowoomba is surrounded by $30 billion of in-progress and potential renewable energy projects, particularly in Western Downs,” he said.
“For those looking to invest in the region, the median house price remains affordable at $490,000 and has been growing steadily in the past two years.
“Meanwhile, the number of rental listings have been declining – resulting in an extremely low vacancy rate and strong rise in rental prices in the last year. It’s expected rents will also continue to rise.”
According to Mr Paliwal, Rockhampton is also one of the major cities in the Central Queensland Renewable Energy Zone and has 67 registered interest projects, representing more than $39 billion in renewable energy investment and thousands of construction jobs.
“While construction jobs only create short-term benefits, renewable energy projects can boost the economy in the long term by strengthening sectors such as energy-intensive mineral processing, low emission manufacturing, agricultural equipment manufacturing and more,” he said.
“The Rockhampton property market has been growing steadily over the past two years, with the median house price sitting at $375,000 and with further room to grow.
“However, its rental market is extremely tight and led to consecutive rises in rental prices over the past two years.”
In NSW, the New England Renewable Energy Zone is being planned, with Tamworth and Armidale among the potential sites for pumped-hydro development.
These areas are also home to high-quality solar and wind power resources, according to Mr Paliwal.
Mr Paliwal said the unemployment rate in Tamworth and Armidale has been hovering at healthy levels of between 3.8-5.7 per cent over the past 12 months and the number of job ads has been increasing since 2020.
As construction on renewable energy projects commences, he expects the local job market and economy will go from strength to strength.
Meanwhile, in Dubbo, you’ll find the Central-West Orana Renewable Energy Zone, the first declared zone in Australia, with overall renewable energy investment valued at $5 billion across the region.
“Dubbo’s property market has been growing since late 2021: the median house price is $420,000 and sale days on market have continued to decline for over a year – indicating Dubbo has high market pressure,” Mr Paliwal said.
“Rental vacancy rates remain at extremely low levels and have led to a strong rise in prices over the past 15 months. It is expected to continue rising.”
Finally, Latrobe Valley in Victoria is a major hub of the Gippsland region and is planned to become one of the six Renewable Energy Zones in Victoria, Mr Paliwal said.
“Latrobe Valley’s housing market has been growing steadily over the past two years, and its median house price is around $393,000,” he said.
“Interestingly, its rental listings are higher than the same time last year, but it remains at extremely low vacancy rates.
“The high market pressure has led to rental prices jumping consecutively over the past two years.”