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Regional house prices lure Aussies from the big city

4 min read
15 Jul 2020

It’s easy to think that the ‘hip-and-happening’ big cities in Australia would be attracting more people, but a 2020 report by the Regional Australia Institute has shown the opposite trend occurring.

Between the 2011 and 2016 census periods, 501,643 Australians left Australia’s capitals for regional areas, while 436,439 Aussies moved to capital cities from regional areas.[1]

A key reason why Australians are leaving capital cities is housing affordability. While the average value of residential property in Australia’s capitals was decreasing from 2018 to 2019, prices have since spiked back up for most major cities, with the biggest price increases in Sydney and Melbourne.

Change in capital city residential property prices 1st quarter 2019 to 1st quarter 2020.
Capital cityWeighted average change in property value compared to previous year
Sydney+ 10%
Melbourne+ 10.4%
Brisbane+ 2.5%
Adelaide+ 0.9%
Perth– 0.9%
Canberra+ 3%
Hobart+ 7%
Darwin– 3.1%
Source: Residential Property Price Indexes: Eight Capital Cities, Mar 2020. Australian Bureau of Statistics, Australian Government. 2020.

What’s more, data from property information and analysis company CoreLogic shows that in comparison to Australia’s capitals, regional house prices are more stable and don’t lose as much value when the market fluctuates.[2] In the year between May 2019 to May 2020, regional properties increased in value by an average of 3.5%.While regional properties may not increase in value as quickly as capital city homes do (something to consider if selling later down the line), they are much more affordable and more resistant to market fluctuations.

The median property price in May for all regional areas combined was $397,388, compared to the median property price across all capital cities which was $645,511.[3]

Which regional areas are Australians moving to?

the historic Customs House in Newcastle, New South Wales

There are a number of regional and outback towns across Australian states and territories that are seeing an influx of new residents. According to the report from the Regional Australia Institute, areas that saw the biggest influx in new residents included:

  • Maitland, New South Wales
  • Port Stephens, New South Wales
  • Noosa, Queensland
  • Mitchell, Victoria
  • Wodonga, Victoria
  • Bass Coast, Victoria
  • Karratha, Western Australia
  • Surf Coast, Victoria
  • Ashburton, Western Australia
  • Alexandria, South Australia[4]

The pros and cons of living in regional areas

There are several benefits to living in a regional town – it’s affordable, quieter and may bring you closer to nature. Additionally, with modern technology making it easier than ever to work remotely and stay connected, the vast distances won’t always be an obstacle.

Another benefit is the Government’s increased investment into infrastructure and development to improve liveability across Australia. The Federal Government’s Smart Cities and Suburbs program is providing around $50 million worth of investment, with 40% of the first round of funding allocated to regional areas.[5]

However, there is a potential drawback that can affect regional house prices: natural disasters. Though a natural disaster can happen anywhere, regional parts of Australia are typically more vulnerable.

For example, 207 natural disasters in New South Wales between 2004 and 2014 largely affected regional and disadvantaged communities.[6] Conversely, all local Government Areas (LGAs) in the Greater Metropolitan Region around Sydney during this period weren’t affected.[7]

When these natural disasters do strike, they can significantly impact house prices.

In Queensland, the Townsville region saw house prices drop 4.7% in the June quarter 2019 after Cyclone Oma caused flooding and destruction.[8] They continued to decrease by 0.3% in the following quarter before bouncing back, according to the Real Estate Institute of Queensland (REIQ).

Buying a home is a big investment, and it’s important to check whether a prospective property has an increased risk of natural disaster; regardless of location.

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Sources:

[1] Bourne, K., Houghton, K., How, G., Achurch, H. and Beaton, R. (2020). The Big Movers: Understanding Population Mobility in Regional Australia, Regional Australia Institute, Canberra.

[2] Housing Values Edge Lower In May, While Transaction Activity Partially Recovers From A Sharp Drop In April. Jade Harling, CoreLogic. 2020.

[3] Ibid.

[4] Ibid.

[5] Smart Cities and Suburbs Program—Round One projects. Regional Development Australia, Australian Government. 2019.

[6] Natural disasters are affecting some of Australia’s most disadvantaged communities. Dale Dominey-Howes, Eleanor Bruce, Ruby Stephens, Sarah Perkins-Kirkpatrick, Thomas Sewell, The Conversation. 2016.

[7] Ibid.

[8] Queensland Market Monitor: December 2019 | Issue 44. Real Estate Institute of Queensland. 2019.

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Written by James McCay

James is a devoted husband, father, animal lover and history buff (particularly medieval history). He studied Creative and Professional Writing at QUT, and is often buried in a book. James also enjoys historical re-enactment, spending time with his dogs, and making furniture out of reclaimed wood. He hopes to make a positive difference for readers through his writing.

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