AusFinance Gazette

Structural shift in housing demand leading to a regional housing boom

Everybody’s doing it. And I’m not talking about refreshing a map of America at 3AM and waiting for it to change colour

or watching Spanish golfer Jon Rahm’s water skimming hole-in-one and refusing to believe it’s real, I’m talking about moving out of the major cities.

Pandemic fatigue and workplace flexibility have inspired a mass-migration trend as city-dwellers flock to coast or country for a change of pace and a lot more space.

The result is a ‘turbo-charging’ of house price growth in regional areas across the country, with first-home buyers replacing retirees in areas like the Central Coast and Blue Mountains, and buyer demand skyrocketing everywhere from Surfer’s Paradise to Hobart. This mass exodus from Australia’s major cities is heating up regional property markets like never before, with new data released this week from CoreLogic showing a 4.8% increase of value across the combined regional market this year. Between March to October (aka ‘the COVID period to-date’) median house prices across the combined capital cities fell 2.3% but increased 1.7% across the combined regional areas. Here are some of the key zones where things are really heating up.

Central Coast, NSW

Traditionally a popular destination for retirees, the NSW Central coast has seen a boom in younger first-home buyers looking to score more bang for their buck. According to Domain’s latest report, the median house price on the Central Coast rose 3.8% in the last quarter to $675,000, while units have seen a whopping 24.4% price increase in the past 12 months.
The inland town of Wyong has seen an increase of 18.3% in median house prices, now at $532,000. The popular seaside suburb of Terrigal has seen a similar growth with unit prices rising 17.3% to $900,000, and nearby Ettalong Beach up 15.1%.

Sunshine Coast, QLD

Drive another ten hours north and you’ll enter Queensland (not so fast, Annastacia Palaszczuk bellows from above). In a place where weather reports are redundant—Sunshine Beach on the Sunshine Coast—house prices have skyrocketed 46.5% to a record-breaking median price of $1.8 million. In the aptly named Surfers Paradise, house prices have risen by a huge 25.5% in the past year to a median of $1.6 million, with Miami seeing a similar rise of 21.9%. Straddling the NSW/QLD border, the linen-laden beach town of Byron has seen a similar boom with the median house price coming in at $1.16 million, up 29.2% thanks to the Hemsworths.

Blue Mountains, NSW

What was once a popular weekend getaway destination for stressed Sydneysiders has become a permanent residence for many. In the leafy lower Blue Mountains township of Glenbrook, house prices have skyrocketed to $977,000—rising 15% since last year. The picturesque village of Leura has followed suit, with house prices jumping $850,000. With inner city rents comparable to monthly mortgage repayments in the Blue Mountains, the property market has seen an influx of first-home buyers and young families opting for a tree-change.

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South Coast, NSW

From the Shoalhaven region all the way down to Eurobodalla, an unprecedented demand for housing has caused a surge in prices, much to the chagrin of many locals. In the Shoalhaven area, about 200 kilometres south of Sydney, the median house price is $620,000, up 14.8% from 2019. Another two hour’s drive south in the Eurobodalla region, which includes tourist destinations like Batemans Bay, Moruya and Narooma, median house prices have jumped 9% from $505,000 last year to $555,000.

Hobart, TAS

Anyone who’s ever visited Hobart knows how hard it is to leave. So it makes sense that now, more and more people are deciding to stay for good. After five years of steady growth, house prices reached record highs in the last quarter of this year, increasing 6.9% to $555,754. Annual growth is over double that percentage at 15.7%, which when considering growth of 1.2% in Sydney, 0.9% in Perth, and zilch in Melbourne, is a pretty astounding feat. The market here has become so competitive that recently a three-bedroom house in the beachside suburb of Howrah received 20 written offers before selling for close to $100,000 above asking price.

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