Buyer’s agents are witnessing a steady surge in regional property markets for investors and homebuyers, particularly since COVID-19.
Australia’s leading buyer’s agents say properties in many regional locations are exhibiting firm demand, short days on the market and strong competitive numbers despite COVID-19.
Real Estate Buyers Agents Association (REBAA) president Cate Bakos said young families, relocating workers and retirees looking to optimise their superannuation savings were among some of the home buyers opting for a regional owner-occupier change.
“For those who seek a sea change or tree change lifestyle, the appeal of some of our nation’s regions is enough to tempt many to opt out of city life and pursue a welcome change,” said Ms Bakos.
“For investors who have witnessed some particularly strong regional city capital growth rates, the added bonus of (typically) stronger rental yields has presented an attractive option for those who favour a more balanced portfolio.”
She warned would-be buyers who were unfamiliar with their target region to consider renting an Airbnb for a week or two to ‘test drive’ their decision.
“Be mindful that if you do have to commute to a major city for work, whether it be one day per week or five days per week, that you can tolerate the commute journey and all that goes with the extended travel time,” said Ms Bakos.
“Make sure you buy something with resale ability just in case the move doesn’t work out. Don’t buy a property that’s on a main road, or is too odd or quirky, buy something that’s popular with the locals.”
She also cautioned aspirational home buyers targeting regional locations to make sure they buy a property that can accommodate visitors.
“Assuming that friends and family will visit regularly is a common mistake,” said Ms Bakos.
“One of the main reasons cited by these buyers why regional moves don’t work out, is often because they miss family and friends too much. Make sure you a buy a property with an extra room or two so that guests can stay for the weekend or longer.”
According to Propertyology Head of Research, Simon Pressley, the current trend was not a new phenomenon with more than 52,650 (net) Australian residents migrating from capital city locations to the regions over the last three years. (see appendix A).
He predicted those numbers would increase with the onset of NBN, Pay TV, Skype, and Zoom.
“Truth be known that five out of eight capital cities had a net decline in population from internal migration last year,” he said.
“Of the Australians who moved cities last year, Brisbane and Hobart were the biggest beneficiaries of the capital cities, but Melbourne only gained 590 people and every other capital city had a net loss. Sydney has lost 53,000 residents in the last two years.
“The official data also shows that most of Australia’s best-performed property markets over the last five years were spread throughout regional Australia, not in the capital cities.”(see Appendix B)
In Wollongong and the South Coast of New South Wales prices have held firm over the last three months, according to local buyer’s agent Matt Knight from Precium Property.
Mr Knight said he had seen a fresh pulse of boomers keen to leave the city since travel bans were lifted with many attending open homes en masse.
“The vibe seems to be “Carpe Diem” – seize the day!” said Mr Knight.
“Quality areas are still attracting quality buyers. Well-styled first home and boomer-suitable homes are selling quickly.”
In Orange, local buyer’s agent Matt Ward from Aspect Buyers Agency, has witnessed solid interest and demand for rural lifestyle blocks especially those closer to larger regional centres, even during the Covid-19 lockdown.
“We’re seeing a lot of new entrants into the market as more people realise that the need for space, a side income and somewhere to escape to on the weekend can all be met in the one property,” said Mr Ward, whose buyer’s agency specialises in rural property and farms.
“There is a real skill shortage in the larger regional cities, across most industries. Seek.com is currently listing more than 50 jobs in Orange that pay more than $100,000 per annum. With a median house price of $430,000, that’s a pretty good income to house price ratio.
“The COVID-19 situation brought to people’s attention the issue of food security and their inability to grow their own, so demand for properties with this potential have remained keenly sort after.”
While the North Queensland region has been heavily impacted by travel restrictions, it remains an attractive market for those wanting to retire and relocate from the big cities to the regions, with these buyers likely to gain momentum as travel restrictions are lifted.
ABS data shows over the two years ending February 2019, Cairns had the single biggest increase in job volumes (24 per cent) in all of Australia, while Townsville outperformed both the national and state average over the last 12 months. Both cities have incredible infrastructure, spectacular lifestyle, and good quality homes for sub $450,000.
In Newcastle, apartment sales have slowed dramatically with A-Grade properties with views still in demand, according to buyer’s agent Tiron Manning from Newcastle Buyer’s Agent.
“The lower end of the market, sub-$700,000 is very active with first time buyers dominating open houses,” he said.
“The low-ball offers are falling well short and subsequently those buyers are wondering why the agents are not following them up or returning their calls.”
Fellow Newcastle buyer’s agent Richard Evans from Fortune Property Finder backed up these claims saying interest in regional areas like Newcastle, The Hunter Valley and Lake Macquarie had only increased with the advent of Covid19.
“Lifestyles went under the magnifying glass during the lockdown with many people considering a regional change as their new normal,” he said. “Whether it is the appeal of a seaside city apartment, character cottage with relaxing permaculture garden and art studio, or an investor chasing higher yields, regional cities and surrounds offer a great mix of opportunities for those who are prepared and enlist the best local support available.”