Regional areas in New South Wales and Victoria have seen a huge spike in house sales as city residents move away from Sydney and Melbourne.
Housing Industry Association Chief Economist, Tim Reardon said more than 60,000 people have left Sydney and Melbourne to go to other regions in the past 12 months.
“The exodus of residents from Melbourne is a trend that has emerged following the COVID-19 recession with more than 32,000 residents departing in the year to March,” Mr Reardon said.
“Sydney also lost 31,600 residents to other parts of the country over the same time however, this is consistent with the trends of the past 20 years.”
Mr Reardon explained the shift in population is the main driver of the tight rental market across the country, other than in Sydney and Melbourne.
“Regional areas have seen a greater increase in building approvals than capital cities as the population shifts toward lower density areas. The 220,000 building approvals in 2020/21 is the most in a financial year since 2017/18,” Mr Reardon said.
“Given that the population is moving interstate and building new homes it is unlikely that they intend to return to Sydney or Melbourne.”
Mr Reardon said the population shift out of Melbourne is a new trend that is compounded by the loss of overseas migration, which has underwritten economic growth in Victoria for the past decade.
“ABS Housing Finance data was also just released and shows that there were 94.4 per cent more loans issued for construction of a new home than in the previous financial year. This is the most loans ever issued for construction in a 12 month period,” he said.
“HomeBuilder and other grant programs have also ensured that there were more loans issued to first-home buyers in 2020/21 than in any previous financial year.
“Building approvals and issuing of loans for construction did fall in the month of June 2021, confirming that the bulk of new projects initiated under HomeBuilder have passed the last regulatory hurdles.”
The data comes after news.com.au reported the median house price for more than 50 regional NSW locations has reached $1 million.
The publication noted the South Coast, Southern Highlands and Northern Rivers region, including Byron Bay, were particularly popular areas and prices have soared.
With a median house price of $2.7 million, Byron Bay is now the country’s priciest major housing market, while prices in nearby Ewingsdale average about $2.2 million, according to the publication.
The Southern Highlands reportedly had among the state’s fastest growing house prices over the past financial year, with house values increasing by an average of 26 per cent. Over 60 houses in the region have sold for more than $3 million in 2021 alone.