Flee-change: How our flee from big cities is changing the housing market

Research points to a ‘structural break’ emerging in migration patterns, indicating regional living will be a valid option for many householders in the future.

Residz Team 3/11/2022 3:38:15 AM 4 min read

Where we choose to live in Australia is quietly undergoing a step change. When property buyers and renters moved to the regions to flee Covid lockdowns, I’ll bet many of us thought it wouldn't last. But recently released data collected over two years shows a ‘structural break’ emerged in migration patterns, indicating regional living will be a valid option for many householders in the future.

Trend is bedding down

Following 2021 research showing 1 in every 5 people living in our capital cities were considering a regional move, the Regional Movers Index report shows net migration did indeed remain elevated throughout the pandemic, and more than doubled pre-pandemic levels. Experts say this indicates the trend is bedding down, and the opening of international borders will only continue this.

More balanced Australia

“It looks like the pandemic is changing some long-established movement paths,” says Regional Australia Institute chief economist and acting CEO Kim Houghton in a press release on the index, a partnership between the Regional Australia Institute (RAI) and Commonwealth Bank. He says this is a good sign for more balanced population growth across Australia in future. Kim says it is particularly exciting that many of the smaller regions showing high rates of growth are inland towns.

Flexible work and open borders

For regions to continue to thrive, many capital city workers will have to leave their current employer or negotiate for full flexibility. Other residents will come from overseas.

“As we see flexible working arrangements continue and Australia’s domestic and international borders opening up, it’s likely we will continue to see this movement as people recognise the benefits of a regional lifestyle,” says Commonwealth Bank Executive General Manager for Regional and Agribusiness Banking Paul Fowler.

What it means for the regions

The reshaping of regional Australia must be bittersweet for the locals. Big earners coming largely from Sydney and Melbourne are hoovering up all the real estate in town, often driving house prices up. In the AFR, Elders reported that homes were snapped up a day or two after hitting the market at significant premiums to the listed price. However, they also increase the population, bring in enthusiasm and expertise, spend money, and hopefully contribute to the community spirit.

Benefits of regional living

It’s easy to reel off many of the benefits of moving to a regional area:

No commuting or fast commute.
Cheap and easy parking.
More affordable housing, or larger homes for the same price.
Relaxed lifestyle.
Cultural, arts, and sports events.
Low unemployment rates (in some regions).
Less stress.
Closer to nature.

Challenges of regional living

A slower pace may be a benefit or a challenge, depending on your point of view, but it’s certainly less hurried living in a regional area. Other challenges may include:

Less choice and higher cost of goods.
Fewer tradespeople.
Higher fuel bills, as you may need a car more often.
Smaller choice of activities.
Further away from a major airport or specialist medical centres.
Distance to family and friends.

Strongest five for annual growth

Affordability, larger property size, or lifestyle are the most enticing of the benefits. The local government areas (LGAs) which experienced the strongest annual growth in migration from capital cities during 2021 were all in South Australia and Queensland:

Port Augusta, SA (+54 percent from 2020) Business Port Augusta spokesman and real estate agent Darren Sherriff told ABC Riverina sales volumes had probably tripled. “"I've been in Port Augusta for 16 years and I haven't seen it like this before," he said.
Douglas, Qld (+49 percent) The Douglas local government area includes around 23 cities, towns, villages and localities including Port Douglas, Craiglie, and Mossman.
Western Downs, Qld (+48 percent) Many families are drawn to the region’s affordable cost of living, with Residz’s Investability Index tool showing housing prices sit significantly below the Queensland average.
Mount Gambier, SA (+44 percent) Mount Gambier is expected to have 30,000 residents for the first time ever in 2022, and is one of the only regional centres more than 100km from Adelaide consistently adding more than 100 residents each year.
Banana, Qld (+40 percent). Major industries include coal mining, beef production, power generation, dryland cropping and irrigation cropping such as lucerne and cotton.

But no surprise, the large coastal centres close to capital cities get the lion’s share of metro-movers. With big city amenities but small city house prices, they are hugely popular with Sydneysiders and Melbournites.

They include:

Gold Coast, Qld (11 percent share of regional migration)
Sunshine Coast, Qld (5 percent share)
Greater Geelong, Vic (4 percent)
Wollongong, NSW (3 percent)
Lake Macquarie, NSW (2 percent).

As this chart shows, there was a drop off in regional migration in the December 2021 quarter which may be due to tighter housing markets (no affordable places to buy or rent) as well as the usual seasonal drop off in activity.

The Regional Australia Institute says previous strong growth in migration is clearly easing in Geelong and Wollongong, but staying strong in Mount Gambier, Lake Macquarie, and some of the Queensland coastal towns.

Tipping point reached

How everything settles as we move out of the pandemic is anyone’s guess. There are many push and pull factors at play. Many home buyers have reached a tipping point in capital cities where they opt for a unit or move to a regional area rather than staying out of the market altogether. Now that some office workers are being asked to return to their city desks, it will be interesting to see which gives way: the move to an affordable region or the job that requires them to stay.

Image: Western Downs Queensland website