The rise in regional Australia’s rental market continues to break records, with thousands of people avoiding returning to city life.
Coastal and regional areas such as Byron Bay, the Gold Coast, and the Sunshine Coast have been attracting people from all over the country searching for greener pastures and avoiding inner-city lockdowns.
Data provided by realestate.com.au shows that the rental market in Byron Bay has been so tight only 30 new house listings were available for an average of 1241 renters in December 2020, a vacancy rate of only 0.6%.
Rental properties in Byron Bay have not only seen a dramatic increase in scarcity but price as well.
For the second half of 2020, the average apartment rental increased by 33%, while rental homes have seen an increase of 66%.
In addition to remote workers searching for a quieter lifestyle, even some of Hollywood’s biggest stars are flocking to Byron Bay.
Actors Chris Hemsworth, Zac Efron, and Matt Damon have all taken up residence in the town or quiet surrounding areas due to Australia becoming a popular film production location.
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The Gold Coast has also been a hot area for rentals, with vacancy rates averaging below 1% across the city and falling as low as 0.1% in the southern suburb of Currumbin.
Current residents of the Sunshine Coast are also feeling the effects of city-dwellers flocking to their regional areas.
Non-profit organisation National Shelter is lobbying lawmakers to put a cap on rent increases and provide more affordable housing to Sunshine Coast locals.
National Shelter Executive Officer Adrian Pisarski believes that the Sunshine Coast has become one of the most unaffordable places to rent in Australia right now.
“It’s got one of the tightest vacancy rates going in Australia”, he said.
“Anybody who is on an income or household income less than $60,000 a year, there will be nothing available on the Sunshine Coast that they can feasibly rent.”
According to the Australian Bureau of Statistics, 43,000 more people relocated from capital cities to regional areas than the total number of regional residents moving to CBD’s last year.
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CoreLogic’s head of research Eliza Owen has hypothesised that part of the reason for the boom in regional rent growth is due to the types of workers seeking residence in smaller towns.
“Regional relocation from cities to regions may also be increasingly skewed to higher-income workers, which would put further upward pressure on purchase and rent prices,” she explained.
“This is because remote work tends to be concentrated in the ‘knowledge economy,’ such as for professionals, as well as clerical and administrative workers.”
The shift to remote work happened fast, with 32% of employed Australians working remotely in some capacity during June of 2020 due to the widespread repercussions of COVID-19.
Out of the people working from home, high-paying industries were some of the most flexible, with 58% of finance and insurance jobs, 51% of public administration jobs, and 47% of communications jobs being completed outside the office.
So why are Australians attracted to regional life? For many, it’s the better flexibility and work-life balance that often can’t be replicated with city living.
According to a global study by Atlassian that looked into work-from-home experiences of over 5,000 employees during COVID-19, nearly 7 out of 10 Australians cite the shift to remote work as being responsible for improved job satisfaction and work-life balance.
For non-remote workers moving to regional areas, it’s also easy to see the appeal.
Shorter commute times, overall reduced expenses, and often cheaper-than-city rent despite the current increases mean that people are still spending less moving regionally than living in major cities.
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Melbourne resident Tania Bellofiore spoke to the BBC about her family’s experience moving to a regional area.
What started as a temporary getaway to Phillip Island may now become a permanent home for the new parents.
“We’ve come to love the unhurried pace and small community feeling of Phillip Island, and we’re close enough to the city to commute as needed,” she said.
“Sometimes it’s hard to imagine going back to the busy city lifestyle, especially with a young family.”
Despite the significant shift to regional areas, the feeling in the industry is that it’s not all doom and gloom, especially for commercial rentals.
SQM Research Managing Director Louis Christopher believes that CBD vacancies will return to a normal pre-COVID-19 level sooner rather than later.
“Those vacancy rates could begin a downward trend over the second half of 2021, particularly in Sydney, as life resumes relative normality,” he said.
“At this rate, vacancies in the CBDs could drop to pre-COVID levels by the end of the year.”
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Dr James Lennox, from the Centre of Policy Studies at Victoria University in Melbourne, has created hypothetical examining the impact that working from home will have on Australia’s big cities.
They show expected “flattening” of urban density gradients in Melbourne, Sydney, and Brisbane, but that doesn’t mean urban city areas will become empty.
“Some people will still choose to live in the centre of the city because they like the lifestyle and having access to all the things that are going on in the city centre,” Dr Lennox said.
“One thing that seems fairly obvious at the moment is that there will be a decrease in office-based workers in central city areas on any given day… but I don’t think that means the death of the inner city – perhaps quite the opposite.”
Time will tell as to whether record-low vacancy rates in regional Australia continue, but for now, landlords outside of the major cities are the real winners.
Words by Rimas Veselis
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