Regional property markets have significantly outperformed city markets on average over the past year and new research indicates median prices in regional areas across the country were up by an average of 3.4 per cent for the year to June 30, 2020.
By contrast, capital city markets grew by just 1 per cent in the same period, according to the research by PRD Real Estate.
And, according to SQM research, much of this is being driven by demographic and employment changes as people adapt to a Covid World.
Many businesses are realising that their employees can perform perfectly adequately from home. As a result, it is easy to keep a job and live some way from the CBD
Employees are increasingly attracted to more affordable locations and traffic is minimal.
For businesses, the immediate opportunity is the reduced floor space requirement through not having mostly everyone centralised in one office. That will mean a significant saving on office rents.
According to SQM, in the Blue Mountains, since the start of Covid-19, rental vacancy rates have plummeted from 3.2 per cent to 1.1 per cent. It won’t take long for this to flow through into demand to buy property
It’s the same situation for Sydney’s Central Coast – vacancy rates dropped from 2.7 per cent in Dec-19 to 1.2 per cent in Jun-20.
While rental vacancies in the Mornington Peninsula have dropped from 1.7 per cent in Dec-19 to 1.1 per cent in June.
And a similar pattern in the region between Brisbane and the Gold Coast – dropping from 3.2 per cent in Dec-19 to 1.4 per cent in June.
Unlike Melbourne and Sydney, regional median prices are now higher or steady in all states, with regional Tasmania up by 9.8 per cent, regional NSW up by 5.3 per cent in and regional Victoria up by 4.4 per cent for the year to June 30.
Regional markets tend to be more insulated from economic shocks, as they rely less on international trade and housing is more affordable.
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