A move to the country has become even more appealing during the pandemic as some Australian cities endure repeated lockdowns and workers adapt to the new work-from-home (or anywhere) lifestyle.
The exodus of city dwellers to regional areas during the COVID-driven lifestyle shift has continued, with new Australian Bureau of Statistics data showing 11,800 people moved out of Australia’s capital cities in the March quarter – the largest net loss on record.
Historic-low interest rates and a rise in demand for regional homes over the past year has caused house prices to skyrocket, with 58 regional suburbs joining the million-dollar club in the 12 months to June 2021, taking the total number of multimillion-dollar regional suburbs to 110, according to new analysis from realestate.com.au.
Looking across the states, there are now 58 multimillion-dollar regional suburbs in NSW, 42 in Queensland, nine in Victoria and one in Western Australia. Suburbs had to have at least 10 sales in the 12 months to June 2021 and in the previous year to be included in the data.
Economist at realestate.com.au Anne Flaherty said the number of new million-dollar regional suburbs is extraordinary.
“Traditionally we think of regional areas as being more affordable, but this growing demand for regional lifestyle suburbs is just pushing up property prices in these areas,” Ms Flaherty said.
“A lot of the demand has come from people moving away from cities, chasing that lifestyle driven in some ways by COVID.”
But Ms Flaherty said regional price growth could start to wane once Australia reaches the other side of the pandemic.
“It’ll be interesting to see if we start to see more people return to cities,” she said.
“It’s possible these suburbs could drop back below million-dollar medians depending on the area. A lot of regional suburbs are actually more volatile than suburbs closer to cities, so they’re more affected by swings in demand.
“I wouldn’t expect the demand to change too much over the short term, but over the long term we might start to see a shift in preferences for where people want to live, which could impact those regional areas.”
The new and existing million- or multimillion-dollar suburbs in each state with the biggest jumps in median house price over the past year tend to be highly sought-after lifestyle areas such as Byron Bay, which recorded an increase of 86% to hit a median of $2.7 million.
While the celebrity hotspot was already a million-dollar suburb a year ago, high demand for homes in the area has spilled over into surrounding suburbs, with Brunswick Heads surpassing a million dollars to reach a median of $1.52 million after experiencing a 55% increase.
The seaside towns of Marengo, near Victoria’s picturesque Apollo Bay, and Quindalup, in south-west WA, joined Australia’s regional million-dollar club with median house price jumps of 45% and 35%, respectively. The rural town of Kingsholme, located in Queensland’s Gold Coast region, also surpassed the million-dollar median to hit $1,185,000 with growth of 72%.
Along with lifestyle factor, Ms Flaherty said many of the suburbs on the list will likely retain strong demand over time because of their relative proximity to major cities.
She added that typically low supply in these lifestyle suburbs will continue to drive strong buyer competition, which will keep prices high.
“There is enormous competition in these areas, particularly in beachside suburbs; those are the ones where you’ll probably see the most demand relative to supply.”
The median house price has surpassed $2 million in popular Byron Bay. Picture: Getty.
Director in sales at Ray White – Gerringong, Kate Morgan said low supply has a lot to do with the huge increase in median house price in the coastal town of Gerroa, in the Illawarra region of NSW, over the past year.
While already in the million-dollar club, Gerroa recorded a 106% jump in median house price in the year to June 2021 that took it past the $2 million mark to hit $2,475,000.
“Gerroa is quite landlocked, so there’s only a limited number of houses and the majority have beautiful ocean views,” Ms Morgan said.
“At the moment with people wanting to escape Sydney or buy their holiday home, anything with good views and easy access to the beach is in high demand, so somewhere like Gerroa where there’s only ever one or two houses for sale at any point in time, demand has just gone through the roof with people fighting over them.
“It’s how the market basically always is in Gerroa. It’s pretty rare to have more than about three properties for sale at the same time.”
Ms Morgan said there have always been a lot of Sydney buyers looking for homes in Gerroa, but this has increased during the pandemic.
“There’s always been a lot of Sydney-based people looking to buy holiday homes in Gerroa, whether they’re using it for income or for their own use, but there are also a lot of locals trying to buy in as well. The mix [of buyers] is still there, it’s probably that the percentage of Sydney-based buyers is higher at the moment than what it was [prior to COVID],” she said.
“We’re only 20 minutes to Shellharbour, which is right at the southern end of Wollongong, so in terms of good shopping and things like that, it’s all quite close, and still has easy access to Sydney.”
Most houses in Gerroa feature stunning water views. Picture: realestate.com.au/buy
The COVID-led lifestyle shift has seen regional property prices rise exponentially over the past year, and the trend is likely to continue in the months ahead, according to Ms Flaherty.
“I think we’ll definitely see more regional suburbs join the million-dollar club because property prices haven’t finished rising, and the level of price growth in regional Australia has been outperforming the greater capital city areas of Australia,” she said.
“There’s still a lot of momentum [in regional Australia] so there are a lot of suburbs that are going to tip over that million-dollar mark over the coming months.”
The post Australia’s regional multi-million-dollar club hits new high during COVID appeared first on realestate.com.au.
Record-low interest rates and a rise in demand for regional homes over the past year has caused house prices to skyrocket with 58 regional suburbs joining the million-dollar club in the 12 months to June 2021.
The post Australia’s regional multi-million-dollar club hits new high during COVID appeared first on realestate.com.au.