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Covid-19-regional-benefit

August 2020
CAN REGIONAL
HOUSING MARKETS BENEFIT FROM COVID-19?

In the June 2020 quarter, about three months into the engineered economic slowdown, Corelogic data showed regional centres have seen higher capital growth than the capital city regions.

An emerging narrative around regional dwelling markets is that they may see increased demand as a result of Covid-19.

This is thought to be driven by the way the pandemic has forcibly introduced remote work for knowledge-based or clerical workers.

As employers and employees adapt to remote working conditions, physical proximity to a workplace may become a less important factor in home purchases.

Areas with the highest levels of net internal migration over 2018-19 (where more people moved to an area from another part of Australia than departed it) are shown below.

These include the Capital Region of regional NSW, the Sunshine Coast, Melbourne–West, the Gold Coast and Ipswich.

Top 5 locations

From these examples, there was already a trend of movement from more suburban or metropolitan areas to regional areas.

But two of the highest levels of net internal migration are actually still within capital city bounds. Melbourne–West and Ipswich are technically in greater capital city regions, but see a large number of migrants from the inner city.

This may reflect both availability of developable land transitioning to large greenfield housing estates as well as cohorts such as inner-city renters and first home buyers making the transition to buy in more affordable areas that are still commutable to the CBD.

That is an important trend to consider, because it is a scenario where past migration may have been driven by affordability instead of preference for a regional lifestyle.

If that is the case, a mitigating factor to the draw of regional areas during Covid-19, is that dwellings closer to the city are also becoming cheaper, which may slow migration to the city fringe.

But affordability is not the only drawcard of regional Australia.

Parts of regional Australia may offer lower levels of population density, which is arguably desirable in the wake of a pandemic.

There have also been recent examples of people departing from higher socio-economic areas to parts of regional Australia.

Author: Eliza Owen
Read the full story here:
theurbandeveloper.com/articles/can-regional-housing-markets-benefit-from-covid-19

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