Predictions of a mass return to the cities following the end of the COVID-19 pandemic have been overstated, according to one expert who is predicting continued growth in regional property markets.
Terry Ryder, the director of Hotspotting, said the exodus to affordable lifestyle locations began at least five years ago as people left big, expensive cities for smaller, more affordable locations.
“While the COVID-19 lockdown period made all this more visible and gave it extra momentum, this trend certainly wasn’t caused by the pandemic,” Mr Ryder said.
“Fundamentally, this big migration of the population has been caused by the pursuit of lifestyle and affordability, enabled by technology – the ability to work remotely.”
Mr Ryder said Australians had been relocating in large numbers to the regions, with Queensland and Western Australia being the most popular destinations.
He said there is a misunderstanding of the affordable lifestyle trend, resulting in some commentators suggesting that people will move back to big cities now that the pandemic lockdowns are behind us.
“There’s no statistical evidence that this is happening, and we certainly don’t expect it to happen,” he said.
He said that families are heading to locations that offer lifestyle at prices that are affordable compared to Melbourne, Sydney, and Canberra, where median prices range from $900,000 to $1.2 million.
“The result for regional property markets has been extraordinary, leading to strong demand and price growth in many areas,” Mr Ryder said.
He said that regional markets had continued to outperform capital citiees.
“Indeed, the regions overall have been outperforming the capital cities on price for the past five years, thanks to this compelling trend,” he said.
“And now, at a time when some markets are declining from the boom-time peak levels, the regional markets overall are showing the strongest resistance to the downturn trend…,” he said.
‘Hill change’, not sea change
Mr Ryder believes the focus on different locations and regions for migrants may change, and that people may make a “hill change” rather than a “sea change,” focusing on affordability and lifestyle in a hinterland or country setting.
For investors seeking to capitalise on this trend, Mr Ryder recommends choosing the location well and ensuring there is a strong and diverse economy creating new jobs, good transport links, a good level of infrastructure spending, affordable housing, and an attractive lifestyle.
“Buying in a regional centre can represent a win-win-win situation for investors – cheaper prices, higher rental yields, and good potential for price growth,” Mr Ryder said.
His new report, titled Hotspotting Exodus to Lifestyle – National Top 10, has revealed the top affordable lifestyle locations with the best upside potential and the reasons behind the exodus that has been underway for at least the past five years.
According to the report, Toowoomba, Yeppoon, Townsville, and the Southern Moreton Bay Islands in Queensland took four of the top 10 spots, with three in South Australia, two in Western Australia, and one in Victoria.
The report analysed rising sales activity, potential for capital growth, affordable housing, strong infrastructure, both existing and planned, and proximity to major jobs nodes.
The top locations identifed by the report were:
- City of Toowoomba, Qld
- Yeppoon, Qld
- City of Geraldton, WA
- City of Mt Gambier, SA
- City of Bunbury, WA
- City of Townsville, Qld
- Mitchell Shire, VIC
- Rural City of Murray Bridge, SA
- Southern Moreton Bay Islands, QLD
- City of Port Lincoln, SA
