Affordability creates second wave for regional property

A second wave of Australians abandoning capital cities is putting pressure on regional property markets as affordability becomes a pressing issue.

Fredrika Akander and Nick Lees are moving to the Gold Coast after being squeezed out of the Melbourne property market. Picture: Aaron Francis

A second wave of Australians abandoning capital cities is putting pressure on regional property markets as affordability becomes a pressing issue.

One of the strongest property trends that emerged from the pandemic was the movement towards the sea and tree-change, with many seeking more space and greater lifestyle after being locked in their home.

While people are still moving, their motivation is changing.

Property prices climbed 7.8 per cent nationally over the past year, according to property researcher CoreLogic. While values in regional Australia have recorded double-digit growth in that time, median prices are only two-thirds that of capital cities.

Capital city pricing has quickly caught up in recent months, with quarterly growth to the end of April higher than that in the ­regions for the first time since the pandemic began.

CoreLogic head of research Eliza Owen said there has been a persistent trend of migration to ­regional areas in recent years that was only exacerbated by the pandemic. While some have questioned the longevity of the demographic shift, Ms Owen said affordability pressure might see it continue.

“Given that most capital cities are sitting at record highs, we’ll probably see more movement to areas that are either on the periphery of large cities or regional centres that are more affordable,” she said.

“That creates additional pressures of displacement for some of those regional centres as well and eventually prices become less ­affordable for locals. That can create some disruption and may have more of a spillover effect into buying into different areas.”

Australian Bureau of Statistics data released last week revealed 223,100 Australians traded capital cities for ­regional areas last year, while only 190,200 moved the ­opposite way.

The biggest beneficiaries were regions with a clear lifestyle ­appeal, with the areas of most significant growth in the Richmond-Tweed market of northern NSW (up 20.7 per cent), southeast Tasmania (up 19.6 per cent), the NSW southern highlands and Shoalhaven market (up 19.2 per cent) and the Sunshine Coast (16.6 per cent).

Melbourne couple Fredrika Akander and Nick Lees are spending their free time filing moving boxes after buying on the Gold Coast. The couple had planned on buying close to the water at home, but after the second lockdown caused them to miss out on a property, they decided to set their sights up north.

“When we moved to Yarraville, it was as far out from the city and the beach as we wanted to go,” Ms Akander said. “In order for us to buy a bigger house, we want to start a family and need another room, we would have to move ­further out.”

“We then asked ourselves where we would rather be,” Mr Lees added. “We agreed, Queensland. We looked and housing prices, at the time, were a lot cheaper than Melbourne. What we were looking at was also a lot bigger and better ­values.”

The couple flew back and forth five times before engaging with buyers agent Tony Coughran, principal of SimplyGC, after they repeatedly missed out on homes they were looking at. Originally hoping to get a property fully renovated, they were able to snap up a fixer-upper at Burleigh Waters off-market.

The Gold Coast region recorded the second highest number of sales (7617) in the state in the final quarter of 2020, according to the Real Estate Institute of Queensland. Ray White Surfers Paradise chief executive Andrew Bell said while some of the pandemic-­induced heat had left the market in recent months, tight listing numbers continued to place pressure on prices as new residents exploring their options squeezed rental availabilities.