The idea of being able to work from a beautiful seaside or forested property sounds like a dream come true for many. However, because workplaces were typically situated in major cities and urban areas, this dream was unachievable. However, with the advent of COVID-19 came a change to working habits all around Australia. Suddenly, employees were working from home and companies came to the realisation that productivity could be maintained even if staff weren’t in the office from 9-5.
And so, with this realisation came a significant shift in the property market. Inner-city dwellers who had remained in small houses and apartments for months on end began to move to greener pastures as they were no longer required to head into the CBD during the week.
Are people really moving to regional areas?
Data from the past year indicates that that regional housing markets are definitely showing significant growth. For example
- CoreLogic indices showed that growth in regional housing markets was higher than in capital cities both quarterly and annually. Considering regional areas haven’t outperformed capital cities since 2004, this shows a significant shift in the market.
- The same study showed that from March 2020 to October 2020, while property values in city capitals fell by a combined 2.3%, regional areas actually increased 1.7%.
- It also showed that from September to November alone, NSW regional sales volumes rose more than 14%.
- Analysis from JP Morgan Securities shows that regional areas are growing more than three times the pace of capital cities.
- According to the Real Estate Institute of NSW, property values rose 7% across regional NSW in 2020, around double the gains recorded in Sydney.
Why are people moving to properties in regional areas?
There are many reasons why Australians are moving from the bustling city to regional areas. While this shift is not a new one, it’s fair to say that COVID-19 sped up a pre-existing trend that saw residents wanting a “sea or tree change”.
While there has been intense speculation as to why, experts generally agree that it is due to a number of factors. Firstly, improved working from home capabilities have made it incredibly convenient for people to move away from big cities. With work being done remotely and meetings being held virtually, there is no longer any need to sit in an office.
Secondly, regional and less densely populated areas generally have lower base prices, making it easier for first-time buyers to enter the market. Not only that but the availability and affordability of detached houses (as opposed to high-density apartments) makes regional property incredibly appealing to buyers.
As stated by Tim Lawless, Head of Research for CoreLogic,
“I think this trend is quite entrenched now and it will persist into 2021. People can have the best of both worlds and live in a marketplace with lifestyle benefits and lower prices, as well commute back to big cities if they need to. Perhaps as we go into mid-2021 we will start to see affordability diminish between capital and regional markets.”
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