COVID-19 sparks mass exodus from city to regional property

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on November 06, 2020
COVID-19 sparks mass exodus from city to regional property

Photo by Julia Mitchell on Unsplash

A resurgence in the mining sector and the ability to work from home due to COVID is leading Aussies to shun capital cities in favour of regional property markets.

The REA Insights Regional Australia Report 2020 reveals how two major factors of COVID-19 has resulted in an accelerated interest in regional property markets.

The first is the resurgence in the mining sector and the second is the shift to working from home.

"The strength in mining is being driven primarily by the stimulus that the Chinese Government has deployed to get their economy moving again, as well as the impact of COVID-19 on other mineral producing countries," the report said.

The report points out how Brazil's iron ore industry has been severely impacted by COVID-19 which has led to Australia exporting record levels of iron ore. 

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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 18, 2022. View disclaimer.

"Any regions that have economic growth closely tied to these strong performing minerals are seeing a flow on to house prices," the report said.

"As an aside, one mineral that isn't doing so well is coal and any regional areas closely tied to coal are not experiencing the same resurgence in their economies.

"The resurgence of mining has created interesting results across a range of metrics we track on realestate.com.au. Port Hedland in Western Australia now achieves the highest enquiry from first home buyers in regional Western Australia and is the second most enquired area from investors."

Other regional areas that have performed well off the back of the mining resurgence include mining towns such as Orange, Karratha and Townsville. 

While mining has led to a surge in demand for property in regional areas, the other big factor driving population growth in regional markets is the shift to working from home and wanting more space due to severe COVID lockdown restrictions in major capital cities. 

See also: The 30 Australian locations tipped to become work from home hotspots

"While search in regional Australia started accelerating soon after the first lockdown began in mid-March, it has taken some time to work out whether it was just people locked down, looking for something to do, or alternatively, active purchasers with strong intent to buy," the report said.

"Price growth data now available is starting to confirm that the search activity we were seeing on realestate.com.au was from genuine buyers looking to make the move to beachside areas, far from capital cities.

"The coastal areas from the Mid North Coast up to the Queensland border have been experiencing strong growth post the pandemic, likely driven by strong interest from people located in capital cities, particularly Sydney."

In particular, Richmond-Tweed has "most benefited from the lifestyle shift of white-collar workers being able to work anywhere". 

Despite rising levels of unemployment, there's been strong enquiry from first home buyers in mining and beachside towns driven by government incentives like the extension of the First Home Buyer Deposit Scheme and the HomeBuilder scheme. 

"In some states, these incentives are more generous in regional areas than they are in capital cities."

Most popular regional areas in Australia

The main areas benefiting the most from the mass exodus to regional property includes:

Victoria

  • Geelong
  • Bendigo
  • Ballarat
  • Latrobe-Gippsland
  • Warrnambool
  • Mildura
  • Wodonga
  • South-West

New South Wales

  • Illawarra
  • Southern Highlands
  • Shoalhaven
  • Hunter Valley
  • Central West (particularly Orange)
  • Coastal areas from Mid North Coast up to Queensland border

Queensland

  • Gold Coast
  • Sunshine Coast
  • Mining regions (excluding coal)

Western Australia

  • Mandurah
  • Margaret River region and mining regions

South Australia

  • Port Elliot and surrounds
  • Mount Gambier and South-East

Tasmania

  • Launceston and North East

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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