Add CategoryBuyer interest has surged in parts of regional Australia as the coronavirus pandemic continues to drive demand for property in lifestyle locations.
New realestate.com.au data shows views per listing for properties for sale more than doubled year-on-year in a third of regions across Australia in January.
Realestate.com.au director of economic research Cameron Kusher said views reached record highs across a number of states and overall were much higher than in January 2020.
“We are seeing unprecedented levels of interest in properties for sale, as well as near record-high levels of interest in rentals,” Mr Kusher said.
Views per listing for properties for sale increased across all regions (including capital city areas) in Australia in January, although areas close to the inner city generally experienced the smallest rises.
“With remote working more prevalent, clearly this has driven interest away from city centre areas and towards lifestyle markets of the country,” Mr Kusher said.
Only three of the regions where views per listing more than doubled were not in regional Australia: the lifestyle markets of the Central Coast and the Mornington Peninsula on the outskirts of Sydney and Melbourne, and the Australian Capital Territory.
Perhaps surprisingly given the strong demand for regional areas that still offer a relatively easy commute to a capital city, some of the strongest increases were in regional areas that were not necessarily close to cities.
“Whether that is actually translating into sales remains to be seen but definitely people are looking in these areas,” Mr Kusher said.
“Some people have potentially realised that in the role they are in and the point they are at in their career, they won’t have to return to the office so they are moving to where they want to,” he said.
“Another option is that people are potentially staying in the capital cities but looking for that holiday property in more remote areas.”
Regional areas continue to attract a lot of attention from buyers. Picture: realestate.com.au/buy
Mr Kusher noted those areas often get far fewer views per listing than more established areas, so any surge in interest may exacerbate the level of growth.
He also said the lack of stock listed for sale and rent during January tended to drive a spike in views per listing, although the growth was a like-for-like comparison to the previous January.
Mr Kusher added there was a trend towards higher views per listing in most states even before January.
“Other data such as weekly search volumes showed record high searches in January, which indicates that through the typically quiet period of the year, interest in properties listed on realestate.com.au has been strong and in the case of properties for sale has grown substantially.”
He said the residential property market had experienced a very strong start to 2021, although stock remains low.
Weekly sales volumes over the first five weeks of 2021 were 30.5% higher than in the corresponding period in 2020 and 44.5% higher than over the first five weeks of 2019.
Mr Kusher said the views per listing data had been shown to be predictive of trends.
There has been a surge in demand for housing in regional Australia during the coronavirus pandemic. Picture: realestate.com.au/buy
“Shortly after lockdowns ended we saw that the metric was showing a surge in demand for housing in regional Australia and by the end of 2020 sales volumes and price growth data was overwhelmingly confirming that trend,” he said.
“We generally see a spike in January each year so it will likely fall next month, however, the number of views per listing will likely remain higher than it was a year ago over the coming months.”
Work practices and lifestyle shift boosts interest in regions
The shift to working from home during COVID-19 has made moving to regional areas feasible for many people seeking a lifestyle change and more affordable location, leading to record movement of people from capital cities to regional areas.
The strongest growth in views per listing in January occurred in the New South Wales Central West region (+282%), home to the city of Orange – realestate.com.au chief economist Nerida Conisbee’s pick for town of the year in 2020.
Orange Real Estate licensee and sales agent Scott Quirk said there has been high demand from both owner occupiers and investors and a low supply of properties for sale.
“A lot of people are looking to invest and/or live in homes – certainly around $450,000 to $550,000, you can have multiple offers and even 10 people making offers on the one property,” Mr Quirk said.
There has been strong interest in homes in the NSW regional city of Orange. Picture: realestate.com.au/sold
He said demand was so strong that it made it difficult to set price guides as prices were being determined by what buyers were willing to pay, and he expected more vendors would look at auctions over coming months.
“We’re used to a buyer’s market as opposed to a seller’s market. Prices have gone up in those circumstances at least $100,000 over the last six to 12 months.”
Mr Quirk added that lifestyle changes and the expectation that interest rates will remain low for the next few years were behind the strong buyer interest.
“There’s confidence around, and it’s an affordable bracket.”
Orange, a three-and-a-half hour drive from Sydney, has a median house price of $486,000, an increase of $57,000 since last year.
NSW regions dominated the top 10 national list for growth in views per listing, aside from two regions in Victoria: Warrnambool and South West (+173%), and Hume (+172%) in the state’s north-east.
Janelle Puppa, principal of Janelle Puppa Real Estate, said people from out-of-town had always been attracted to the country lifestyle in Seymour in the Hume region, given its good accessibility to Melbourne – about an hour and 20 minutes on the train – and regional cities like Shepparton and Bendigo.
Ms Puppa said the lifestyle trend was reinforced in the early months of the pandemic, which led to a general shift in preferences towards regional locations in Australia.
“There’s that real lifestyle change that’s always been here before COVID, and that’s why people are still coming out here, because of the lifestyle and the growth that Seymour is indicating moving forward,” Ms Puppa said.
People were attracted to the lifestyle in the Victorian town of Seymour even before the pandemic. Picture: realestate.com.au/buy
“If a property is listed on 40 acres and it’s on a bush block and a weekender, we’re getting more interest from Melbourne people, but as far as your standard residential blocks in town, there’s as many local buyers as there are out-of-town buyers.”
Seymour’s median house price is $340,000.
Queensland’s Darling Downs – Maranoa region (+132%) showed the biggest jump in views per listing in that state in January.
Southern Downs Realty – Warwick sales consultant Mark Mauch said the pandemic had increased interest in lifestyle properties in Warwick and surrounds.
“The acreage and lifestyle market was increasing and getting stronger prior to COVID but it really accelerated through spring and that trend is continuing into this year,” he said.
“We’re getting Gold Coast and Brisbane people moving out here, because to them our prices are quite reasonable and because of our proximity to those places.”
Interest in lifestyle and acreage properties accelerated during COVID-19. Picture: realestate.com.au/buy
Mr Mauch said some of the recent buyers were fly-in fly-out workers moving from Brisbane and the Gold Coast to regional locations that were still close enough for the airport commute.
“They’re saying ‘why do we spend $6-7-800,000 for just a house on a block in the city when we can buy a house and acres for the same amount of money here or less’,” he said.
Warwick’s median house price is $252,000.
Rental interest also jumped, but Sydney and Melbourne suffered
Mr Kusher said while rental views per listing were not quite at historic highs, they were 10% higher overall in January compared to a year earlier.
The lifestyle and regional shift was also reflected in the rental data, although not as strongly as it showed in properties for sale.
“Rental markets dominated by higher-density product have seen falls in rental views per listing or low levels of growth, while lifestyle and outer capital city areas have recorded the strongest increases,” Mr Kusher said.
Rental views per listing more than doubled in a quarter of Australia’s regions, led by Western Australia’s Mandurah (+263%) and Bunbury (+187%), both south of Perth.
The regions that experienced a fall in rental views per listing year-on-year were all in Melbourne and Sydney, where apartment rents have declined.
The declines ranged from a 3% fall in rental views in Parramatta to a 47% fall in inner-city Melbourne.
Mr Kusher said the decline in rental views per listing in inner-city, higher-density markets reflected the lack of migration into Australia during the pandemic.