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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Important Information and Comparison Rate Warning

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. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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 . View disclaimer.

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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