Australian property buyers leave capital cities for regional areas

There has been record movement of people moving to regional areas as young Aussies continue to make the shift away from bustling cities.

There’s been a shift in young Aussies moving to regional areas. Picture: realestate.com.au

The COVID-19 pandemic has created a population boom in regional Australia, while also leading to a complete turnaround in Victoria’s population growth trajectory.

The latest Australian Bureau of Statistics data on internal migration shows there has been record movement of people from the capital cities to regional areas.

Before the pandemic, the ABS regional internal migration data showed consistent trends. People in New South Wales were moving to Victoria and Queensland, and after a mining boom-induced migration shift, people in Western Australia were moving to other states.

South Australia, the Australian Capital Territory and the Northern Territory were far from being net attractors of people, while regional Australia continued to see a drain of people to capital cities.

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More people are moving to regional areas. Picture: realestate.com.au

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“The pandemic has led to a number of structural shifts and migration is no exception,” REA chief economist Nerida Conisbee said.

“After decades of government initiatives aimed at getting people to move out of congested capital cities to regional Australia, the pandemic appears to have significantly helped and the rate of change has been rapid.”

In the September quarter, regional Australia had a net gain of more than 11,000 people from capital cities with regional towns in Queensland, Victoria and NSW being the main beneficiaries.

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Young Aussies continue to look to regional areas to buy a home as they move away from capital cities. Picture: iStock

It was the largest quarterly net loss of people from the capital cities since the ABS started the data series in 2001.

“It will be some time before we can definitely say which towns have benefited, but it is likely to be the regional areas abutting capital cities that did the best including the Sunshine Coast, Gold Coast, Wollongong and Geelong, as well as Northern NSW,” Ms Conisbee explained.

Milennials are making the shift out of capital cities. Picture: News Regional Media

The other big structural change from the pandemic in terms of internal migration is the impact on Victoria’s population growth trajectory.

The ABS data shows a net loss of 3700 people from Victoria in the September quarter, the largest amount lost since September 1995.

“For a state that has been a net attractor of people since the global financial crisis, this is a big shift,” Ms Conisbee said.

“It is important to note that Victoria was in a harsh lockdown and borders were shut during that time period,” she added.

“However, the trend is on par with what we’ve seen in NSW previously, a state that is able to attract the bulk of international migrants but loses high numbers to other states.”

She added that the bulk of population movement out of Victoria were Milennials at peak working age from 25 to 44 years.

With low interest rates, the property market is hot. Picture: iStock

While Victoria saw net migration out of the state, it was Melbourne that was hit hardest. The time series has been tracked since 2001 and has never come anywhere near the level of people lost in the June and September quarters – in excess of 7000 people each quarter.

Regional Victoria did well with 9725 people shifting from Melbourne to regional areas.

“It is likely that by the March quarter of 2021, conditions are going to look a lot more positive for Victoria while regional Australia will continue to see growth,” Ms Conisbee added.

Cameron Kusher, director of economic research at REA Group, said despite all the challenges of 2020, the overall volume of residential sales was 9.6 per cent higher in 2020 than in 2019.

“While both capital cities and regional markets recorded increases in sales, the stronger lift in regional sales volumes confirms the very high regional search activity we were tracking on realestate.com.au resulted in an increasing number of people making the move out of capital cities,” Mr Kusher said.

“The areas with the largest increases in sales over the year were dominated by regional markets and outer capital city areas, highlighting a shift in population perhaps driven by the prevalence of working from home and lifestyle changes,” he added.