The NSW region where house prices soared 30 per cent in a year

Once considered a beautiful, but sleepy, area perfect for a peaceful retirement, NSW’s Southern Highlands is now firing on all cylinders with a pandemic-era surge of tree-changing city escapees fuelling a dramatic growth in its fortunes.

Forecasts from demographic profiling company .id earlier this year predicted the population of the region would increase by around 1.1 per cent a year over the next decade.

That extra demand for housing is likely to keep property prices growing at a healthy level.

The median house price in the Southern Highlands rose by 4.4 per cent in the June quarter to $1.305 million – as against Sydney’s fall of 2.7 per cent – with a stunning 30.8 per cent growth over the year, according to the latest Domain House Price Report.

House rents also jumped 19.8 per cent over the year to $695 a week, and unit rents by 12.8 per cent to $440.

“The Southern Highlands is a good place to invest in, as there’s a need for more rental premises as a lot of people come here and rent before they decide to buy,” says Anne Stone, principal of McGrath Southern Highlands.

“A lot of people renting out homes do it on short-term platforms … so they can use the property when they want it and make more money by leasing it out when they don’t.

“Rents have gone up substantially since COVID. We only have two houses to rent at the moment, one for $1375 a week and the other for $1600, so they’re making a lot of money.”

The region’s formidable capital growth shows few signs of waning. Samuel Lindsay, principal of Drew Lindsay Real Estate, believes the buyers, and owners, of the more expensive real estate in the area aren’t affected at all by interest rate rises.

“So, there’s been no softening of prices,” he says.

“There’s also been limited stock over the past few years because of the great move from the city to regional areas in general, and to the Southern Highlands in particular.

“We’re so close to Sydney and to the coast, too, and we have excellent infrastructure. A lot of people had secondary homes down here, but increasingly they’re making them their primary residence and keeping just a bolthole in Sydney.”

Over COVID-19, there has been no shortage of investors snapping up property, often to rent out to tenants freshly able to work from home while they prepare to downscale themselves and move in at a later date.

Much of the appeal lies in the rolling green hills, the heritage towns and villages, and the picturesque wineries.

“There is such a shortage of long-term rental properties, which makes it ideal for investors,” says Kate McCullagh of DiJones Southern Highlands.

“Before I moved here, I always thought it was a bit of a retirement place. But it’s not. We’re now seeing so many young families moving here because they can give their kids the lifestyle they may have enjoyed as children, riding their bikes to school and their horses at the weekends.

So, it’s very lively, which is great for anyone moving, or investing, here.”