There’s been much talk recently about the impact of COVID-19 on Australia’s housing market. But residential property is proving resilient, especially in regional Australia.
Uncertain times provide the chance for people and households to re-assess their goals and lifestyle choices. As a result, locations outside major cities, whether offering a “tree-change” or “sea-change”, appear to be increasingly attractive to a wider cohort.
This is supporting residential prices, which are holding up well in markets outside of Australia’s capital cities. Domain figures for June 2020, for example, show the median dwelling value for regional Australia rose 0.1% over the three months to June, while the median dwelling value for the combined capital cities actually fell 2.1% over the quarter.
Regional Tasmania (Rest of TAS) recorded the largest increase over the June quarter at 3.4%, now up 11.7% over the year. This was followed by regional Victoria, prices up 1.6% in June and regional New South Wales up 1.0%.
Dwelling Values (Houses and Units Combined)
There’s also evidence of an improvement in regional Australia’s residential rental markets. Vacancy rates have declined in a number of regional locations over the past couple of months. SQM Research June 2020 data shows the vacancy rate north of Sydney, in Newcastle at 1.9%, down from its peak of 4.0% in April 2020. This follows the completion of over 1,000 apartments in central Newcastle from 2018 to 2020. South of Sydney in Wollongong it’s a similar story. June data shows a vacancy rate of 1.8%, down from 2.7% in April 2020.
In Victoria, Ballarat and Bendigo have also experienced vacancy declines, both recording a rate of 1.7%, although rates were relatively low prior. Geelong hit 4.6% in May but fell back to 3.5% in June 2020. Looking to parts of Queensland show vacancy rates in Toowoomba and Townsville have also declined over the past couple of months. Vacancy in Toowoomba dipped below 1% to 0.7% in June, the lowest since 2010.
Regional areas have long provided greater housing affordability, but what’s held back more internal migration is the availability of jobs. If you can take your job with you and successfully work remotely, then it opens up a large number of options for relocation to regional Australia. It’s a trend also being observed in many countries around the world.
For all the disruption, uncertainty and pain COVID-19 is causing, it may just be the stimulus to get households moving in larger numbers. While taking the edge off metropolitan growth, the movement could have a much greater positive impact on the economies and property markets of regional Australia.