City exodus fires up rural housing market, says CoreLogic

Defying the pandemic, all but one capital city posted an annual rise in home prices, while regions saw the strongest growth in a decade.

Luke Cameron and Sarah Raby with their son Fox at their ‘dream home’ they bought in March in the picturesque village of Glenlyon in Victoria. Picture: Aaron Francis

Property prices in regional Australia are expected to climb through 2021 after posting the strongest gains compared to capital cities in more than a decade during the pandemic last year.

Australia’s national housing market finished 3 per cent higher over 2020, according to figures from researcher CoreLogic.

While all capital city markets except Melbourne recorded annual growth of 2 per cent, it was the regions that stood out after a decade of underperforming — with 6.9 per cent gains over the past 12 months.

The treechange has emerged as one of the main trends of the year, as fear of the virus and greater job flexibility allowed people to leave the urban sprawl.

REA Group chief economist Nerida Conisbee said people were still seeking a slower pace of life. Regional suburbs have continued to garner the most clicks on leading online classifieds site Realestate.com.au. Recent data from the site shows nine out of the 10 suburbs that have recorded the biggest increase in views over the second half of 2020 compared to the same period in 2019 were in the regions.

The NSW central coast suburb of Glenning Valley experienced a 317 per cent growth in views over the period, followed closely by Witta on the Sunshine Coast (up 295 per cent). Clicks for the Lower Blue Mountains suburb of Glenbrook, Saratoga on the NSW central coast, and the Queensland towns of Tanawha, Yandina Creek and Sheldon were up more than 200 per cent each.

“Towards the end of last year, people stopped searching in far-flung areas and started looking in areas attached to capital cities,” Ms Conisbee said.

Luke Cameron and Sarah Raby were driving through the village of Glenlyon, north of Melbourne, in March when they saw their dream home had come on the market. They sold their apartment in Melbourne’s Williamstown and made the move with their augmented reality business, Valis, within a month.

 

Mr Cameron believes they may have been priced out of the market if they had waited.

“I think we got in just at the right time,” he said. “We can see that property prices have definitely risen since we purchased.”

National Australia Bank’s head of home ownership, Andy Kerr, said home lending reached the highest level in three years through December, driven by first-home buyers pumped up with stimulus and assisted by record low interest rates.

“Strong interest in outer suburbs and regional areas has continued and, given more flexible working arrangements for many Australians, we expect this to be a lasting trend,” Mr Kerr said.

The bank has tipped a price rise of 5 per cent through 2021.

Early in the pandemic, economists had predicted 10 per cent drops in property prices nationally, but they fell just 2.1 per cent.

CoreLogic research director Tim Lawless said that, in hindsight, the rebound is unsurprising, with the low rates, the lifting of ­restrictions and fast-rising con­fidence supporting the market

National real estate network Ray White reported a “monster December”, with sales totalling $4.2bn ahead of the holidays.

In the capital cities, Darwin had the highest growth in 2020 with a 9 per cent rise, followed by Canberra (up 7.5 per cent), Hobart (up 6.1 per cent), Adelaide (up 3.6 per cent), Sydney (up 2.7 per cent), Brisbane (up 2.1 per cent) and Perth (up 1.9 per cent). Melbourne was the only capital to report a loss (down 1.3 per cent).