That's according to national buyer's agency Propertyology, which has forecast a major transfer of housing demand away from the Victorian capital in the next couple of years, creating beneficiaries elsewhere.
Propertyology’s Head of Research Simon Pressley said a weakened job market and fear of lockdowns would see a rise in interstate and intrastate migration.
“Whether they relocate to a nearby Victorian regional location such as Bendigo, Wodonga, the Great Ocean Road region or whether they completely leave the state, thousands of Melburnians will take action to regain their freedom," Mr Pressley said.
"Prolonged uncertainty for one’s income is unsustainable. Lockdown is no lifestyle!”
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Even prior to COVID-19, Propertyology ranked Melbourne and Sydney property market fundamentals inferior to most other capital cities, and the pandemic has only accelerated this downgrade pattern.
“They are the most vulnerable to the loss of international tourists and international students, they are the two most reliant on overseas migration, they have the highest mortgages to service, and the greatest risk of disruptions because they have the highest population density,” Mr Pressley said.
“For as long as this germ is on planet earth, the property markets of Australia’s two biggest cities will always be the most vulnerable to COVID-19.”
As many as 30,000 to leave Melbourne
Victorian Premier Daniel Andrews announced yesterday that Melbourne's hard lockdown would be extended to 26 October, which Mr Pressley said had caused Propertyology to adjust their forecasts for the city.
“Very low real estate resale volumes, near-zero interest rates and federal government income support packages provide a solid floor for property markets nationally. But Melbourne is now an exception to this rule,” he said.
Propertyology is forecasting one of the biggest swings in internal migration by any Australian city ever, with the 112-day lockdown crippling the city's economy for years.
“A hard lockdown of more than 100-days will be the cause of the biggest shock to Melbourne’s economy that most of its residents have ever seen," Mr Pressley said.
"It is highly possible that it could lose as many as 30,000 people over the next couple of years."
As a result, regional Victorian locations are set to be the beneficiaries of this housing demand, with many locations having tight housing supply and affordable real estate.
"Regional Victorian locations like Bendigo have consistently attracted large volumes of internal migration for many years," Mr Pressley said.
"Cities like this offer great lifestyles, incredibly affordable housing, it’s a quick train trip back when someone needs to go to Melbourne, and their economic profile is less vulnerable to COVID.”
Melbourne a stark contrast to the rest of Australia
Mr Pressley said the rest of the country was a stark contrast to both Melbourne and Sydney, with Propertyology observing upward pressure on property prices and rents.
“Job advertisements have spiked, the glorious spring weather has arrived, and people are getting on with their lives,” he said.
“First home buyer activity is running at record-pace, the HomeBuilder stimulus package is very popular and existing homeowners are cashing in on low interest by upgrading.
"Agents don’t have enough stock to sell, causing regular multi-offer situations and price acceleration.”
Mr Pressley added well-informed property investors recognised large parts of Australia have incredibly low rental supply, yields of around 5%, and a positive growth outlook.
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