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Lifestyle property markets back in vogue

Lifestyle property markets back in vogue

Sea change and tree change property markets appear to be resurging in popularity after suffering a slump after the global financial crisis (GFC), CoreLogic RP Data analysis shows.

The Australian Bureau of Statistics (ABS) recently released figures showing the top 25 regions for internal migration (excluding overseas migration) for the 2014-15 financial year.

CoreLogic RP Data analysts found so-called 'lifestyle' markets—those regions by the coast and/or within the eastern seaboard states but outside the capital cities of Sydney, Melbourne and Brisbane—recorded some of the largest migration increases over the year. 

And 15 of the top 25 regions—including the Sunshine Coast and Gold Coast in Queensland, Mornington Peninsula and Geelong in Victoria, and Blue Mountains and Illawarra in NSW—could wholly or partly be described as lifestyle regions.

Only three regions outside the eastern states featured in the top 25: the south-west and north-east districts of Perth, as well as Mandurah, just outside the WA capital's metropolitan boundary.

The numbers indicate a return to popularity from the low point of the cycle when the Australian property market was hard hit by the GFC.

"Sea and tree change appear to be the long-forgotten buzzwords for the migration of people to coastal and lifestyle markets," said CoreLogic research analyst Cameron Kusher. "This trend was particularly strong before the financial crisis hit in 2008.

"However, since the end of this occurrence, we saw interstate migration slow and many lifestyle markets underperform when compared to the capital city housing markets.”

Regions that have seen a big spike in annual net internal migration include the Gold Coast, whose 2014-15 numbers were up 83% on 2008-09; the Sunshine Coast, up 69%; and the Richmond-Tweed area, up a remarkable 502% on 2008-09 numbers (albeit off a low base of just 365 net internal migrants).

Not just for retirees

CoreLogic also broke down net internal migration figures by age groups to conclude the "increasing migration to coastal and lifestyle markets is being led by families rather than retirees".

"Migration levels data in each of [the 15 lifestyle] regions shows that the shift is being fuelled by those aged 0-14 years and those between 25 and 64 years," the report found.

"Meanwhile, migration of 15-24 year olds is low and often falling and migration of those over 65 years of age is not as strong as younger children and those of working age."

According to Kusher, the statistics "would seemingly indicate that migration within these coastal and lifestyle markets is being driven by young families”.

Why the return to popularity?

Kusher highlighted that "in general, coastal and lifestyle markets have dramatically underperformed in terms of value growth relative to capital cities over recent years, while recently we’ve started to see values rise in many of these regions".

"This supports the increased demand for housing [with migration as a source] which in turn, often leads to increases in home values."

He also argued that the deteriorating affordability of capital city homes has "forced many younger families to look for alternatives to living in the [capitals]".

“Based on the latest ABS data, it is still too early to say that ‘sea change’ and ‘tree change’ has returned," he said.

"However, given the ABS data is almost 12 months old, it’s likely the trend has progressed further over the current financial year as more Australians make the move to lifestyle markets."

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