INDUSTRY NEWSNEWS

COVID-19 drives ‘regional renaissance’ as house prices surge

The regional property market continues to skyrocket, with house prices jumping almost 30 per cent in the year to September, the fastest annual pace in 35 years.

The rapid rise in the regional market is outpacing growth in metro areas, as the ripple effect of COVID-19 sees homeowners flee the city, thanks to increasing work-from-home arrangements.

The findings were revealed in the PropTrack Regional Australia Report 2021, which also showed buyers were happy to pay a premium for properties.

PropTrack Senior Economist and report author, Eleanor Creagh, said throughout 2020, the pandemic drove demand for more space, larger homes, and a change in lifestyle.

“The ability to work from home has seen many people making a sea change, tree change or shift to regional areas,” Ms Creagh said.

“It appears that many ‘city skippers’ have sought out regions that remain on the outskirts of metropolitan areas, within a one to two hour commuting distance of major capitals.”

Dubbed the ‘regional renaissance’, these commutable regions were seeing strong price growth, with new homebuyers taking advantage of both the ability to maintain office connections one or two days a week and the amenities provided by the regional lifestyle, Ms Creagh said.

Queensland continues to be top of mind for those ditching the city, with the Gold Coast and Sunshine Coast the most searched regional areas on realestate.com.au in the year to September 2021, and the most in-demand areas for buyers.

“Unsurprisingly, Queensland has emerged as the face of the regional renaissance for the second year in a row, with demand from property buyers highest in Queensland and the sunshine state saturating the most searched list,” Ms Creagh said.

“With the Delta variant keeping south-east mainland capitals under lock and key for the latter half of 2021, and regional and interstate migration trending above long-run averages, the regions have seen record price growth this year.“

Nearly three quarters of searches on realestate.com.au for properties in Queensland came from New South Wales and Victoria as locals sought to avoid lockdowns, the report showed.

“While the trend in regional relocation has boomed with flexible workplace arrangements and lockdowns, the question will now be: is it this a flash in the pan, or a lasting trend?” Ms Creagh said.

The report suggested the migration shift from metro to regional areas may remain high for some time, but begin falling back towards the long-run average as people begin to return to normal life.

“Price growth in the regions is therefore likely to continue, but moderate from current levels,” Ms Creagh said.

“Already the pace of price growth is slowing across the broad market and we expect that to continue with the peak of the current cycle now behind us.”

Buyers are prepared to pay top dollar too, with the biggest share of sales more than 10 per cent above list price in Newcastle and Lake Macquarie NSW, South East South Australia, Launceston and North East Tasmania, and Geelong, in Victoria.

“Price growth is being driven by tight competition, with many regional areas seeing demand more than double from prospective homebuyers,” Ms Creagh said.

Expectedly, supply of properties in regional Australia is hovering around record lows, having fallen more than 30 per cent in the past year.

Other key findings in the report include:

• The average number of views per ‘for sale’ listing on realestate.com.au has tripled in regional areas since March 2020.

• Since March 2020, the volume of overall email inquiry to agents nationwide has more than doubled, with the share toward regional property almost tripling.

• Email inquiry to real estate agents regionally has increased seven percentage points to peak share in August this year, when both NSW and Victoria were in harsh lockdowns.

• Motivated buyers have their eyes set on Illawarra, with six of the top 10 suburbs with the most highly engaged buyers per listing from the region.

• First-home buyers looking to break into the market have their eyes set on suburbs including Surfers Paradise, Dubbo and Mildura.

For more information and to view the full report visit realestate.com.au/insights

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Nicole Madigan

Nicole Madigan is Senior Journalist and Content Producer for Elite Agent.