Escaping to the country is certainly not a new fad – in fact, there are many TV shows centred on just that – however, during the COVID-19 pandemic ‘going regional’ has become more than just a pipe dream for many Australians.
Since March, property sales and rental enquiries in regional centres have skyrocketed, leaving real estate agents struggling to keep up with demand as city dwellers opt to trade life in the big smoke for something more sedentary. At the same time, dwelling values in regional NSW have been on the up.
While August saw a 0.5% decline in Sydney dwelling values, regional New South Wales saw a 0.4% increase, according to data from CoreLogic.
Elsewhere, values in regional Victoria, South Australia, Western Australia and the Northern Territory all saw a decline while regional Queensland and Tasmania values held firm. Despite this, combined capitals saw a 0.5% drop while combined regional values remained consistent.
You might also like: How COVID-19 is changing Australian home ownership goals
CoreLogic’s head of research, Tim Lawless, said there were a variety of factors impacting the regional housing market.
“Unlike their capital city counterparts, which usually receive 85% of net overseas migration, most regional markets have avoided the drop in demand caused by the pause in migration,” he said.
“Regional markets may also be appealing for their relatively low density and lower price points. The normalisation of remote work through the pandemic could make proximity to major cities less of a factor in home purchasing decisions.”
The small town of Orange, a 4-hour drive west of Sydney in the Central Tablelands region of New South Wales has been no stranger to the growing popularity of regional Australia.
Domain data showed a 7.7% increase in the region for the June quarter, year on year, with the median dwelling price now $447,000.
Compare your interest rate today.
Simone Fogarty, property manager at Younique Property Group in Orange says the town has been proving popular to both owner-occupiers and investors alike.
“During this time the market has seen an influx in both people moving to Orange from larger cities and also investors looking to purchase here,” she said.
“At the moment there is a huge shortage of property for both sale and for lease. Many properties that use to be in the rental market have been changed to Air BNB accommodation. So, the amount of properties available to renters is very limited and this has pushed up the price of properties.”
Further away from Sydney and two hours north-west of Orange, the city of Dubbo has seen prices remain comparatively stable, the region’s prices increasing by 1.8% year on year. Despite this, local and managing director of SJ Shooter Real Estate in Dubbo, Laura Shooter, says the market is the busiest she’s seen it, also noting the return of investors to the market.
“The level of buyer activity is the highest we’ve seen in 5 years since starting our business,” she said.
“All agents are reporting strong enquiry and an increase in pre-marketing sales.”
View this post on Instagram
Enjoy a charming selection of eateries, retail stores and sightseeing right in the CBD of Gilgandra. Wander amongst 1930s buildings, street art murals and stop by the bronze Coo-ee sculpture. Planning your great Aussie road trip? You will find that the heart of Gilgandra is soaked in military history, art, culture and a relaxed way of life. Find more inspiration for your #GreatBigAdventure at greatwesternplains.com.au @visitnsw #visitgilgandra #visitnsw #lovensw #roadtrip #AussieRoadTrip #gilgandransw #gilgandra #visitdubbogreatwesternplains #greatwesternplains
You might also like: Could Payment Defaults Stop Me From Getting a Home Loan?
For those looking to buy or invest in the area, she recommends having your finances ready, noting that due to high demand and competition vendors have been continuing to accept offers where there have been cases of delays with the bank.
“It is a good time to be selling in Dubbo, and if you are looking to rent or buy, be prepared with all paperwork and finances to do the deal to avoid the disappointment of missing out,” she said.
“… there’s been a lot more ‘gazumping’ going on than we’ve seen in a long time – ie owners have accepted an offer but due to the time waiting on the banks to reach exchange, vendors are looking to keep receiving offers in the meantime – this is a very challenging situation for buyers, vendors and agents.”
Top 15 regions for growth NSW
When it came to the top performing NSW regions for median price growth over the last 12-months, the town of Leeton, in the Riverina region of southern New South Wales scored the top spot, according to data from Domain. Here, the median dwelling price increased from $260,000 to $320,000 for the period ending June 2020.
In second place was the infamous Byron region, where prices increased by 21.0%, followed by Parkes in the Central West which experienced an 18.3% surge.
You might also like: Fixed rate home loans lowest on the market
Not enough homes for demand
It’s not just regional NSW struggling to keep up with buyer demand. Chief Executive Officer at Stockdale & Leggo, Charlotte Pascoe, says the increased interest from city buyers has led to supply issues in their regional Victoria offices.
“The issue the regional offices are facing is stock,” she said.
“They have seen an increase in buyers coming from Melbourne and Sydney (retirees finally making the choice to leave the city, families moving back to the country) along with a strong local transactional market.”
However, Ms Pascoe also noted that in their experience interest appeared to be coming from owner-occupiers looking for a lifestyle change, rather than investors.
“The holiday areas have not seen as much of a push as it seems to be people moving for a lifestyle change rather than capitalising on the opportunity to purchase a holiday home,” she said.
“… they want space, land and lifestyle. Most importantly, they want a low-risk lifestyle and to escape the city. There hasn’t been a spike in investors despite brilliant returns. Owner-occupiers are the ones looking to move.”
You might also like: How do guarantor loans work?
Will the regional trend last?
Ms Pascoe believes the trend towards regional living will continue for years to come.
“As work requirements shift off the back of what we are experiencing and people can work from home, the idea and benefit of moving to the country or the coast will be too appealing to overlook,” she said.
“I think there will be a fundamental shift in how people choose to live and gaining more space between themselves and their neighbours will be a driving force for some time.”
As for its impact on regional communities, Ms Pascoe says it is positive.
“Outside of Metro Melbourne, the townships are doing well across the board. I think their communities are staying put and not moving closer to the city, and the increase of interest from Metro Melbourne to move out will increase their populations and local economies,” she said.
You might also like: 8 Short Weekend Getaways in NSW
Words by Kathryn Lee
You don’t need to leave your house to get an eChoice home loan consultation – As always, we will discuss your options over the phone – we’re here to make your home loan journey easier.