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The rising trend of city-siders moving to regional Australia has driven up house prices at the expense of FHBs, brokers have said.
The Commonwealth Bank of Australia’s (CBA) quarterly Regional Movers Index (RMI) found that the number of city dwellers moving to regional Australia hit a 12-month high in the March 2024 quarter.
According to CBA, the number of city dwellers moving to the regions was 20 per cent above the pre-COVID-19 average.
The CEO of the RAI, Liz Ritchie, said the figures showed that Australia’s “regional renaissance” has not finished, with 24 per cent more people moving from the city to regional Australia than regional Australians moving to the cities.
Ritchie said that city dwellers were moving to the regions due to unaffordability in the city, with rising house prices and cost-of-living pressures affecting many.
Speaking to The Adviser, Ashleigh Pakis, mortgage broker and director of Panache Finance in Goulburn, noted that house prices in her region had increased significantly, with her average loan size increasing from $280,000 in 2020 to approximately $400,000 now.
Ben Eick, regional manager of Nectar Mortgages in Newcastle, echoed this, telling The Adviser that the influx of city dwellers into the regions has allowed those borrowers to get “more bang for their buck” in regional areas while being employed on a Sydney wage.
He said that those moving from the capital city to Newcastle had less cost-of-living pressures with cheaper living in the regions, but many are able to remain on “Sydney wages” with more work-from-home opportunities becoming available.
Emma Schuch, a regional NSW mortgage broker and founder of Strive Financial Group, said that she has noticed a trend of city-goers moving to Port Macquarie.
Schuch, however, said that city dwellers moving to Port Macquarie has not driven up house prices in the same way - as it a large regional hub.
”We have, here in Port Macquarie, noticed a lot of city people moving to the country but the prices of houses are staying the same [as in the city].
“The reason why prices here in small towns have gone up is because people from the city are moving here,” she said.
The Port Macquarie-based broker said that demand from city-siders has actually held the region’s market and protected property prices from falling.
Schuch said: “The properties here haven’t taken a big dive and that’s because people are selling up for $1.5 million in Sydney and they can buy a house here in Port Macquarie outright for $1 million. They’re holding our market here in Port Macquarie.”
While the market in Port Macquarie has held steady, Schuch said the tree-change, sea-change effect on price was having a negative impact on local first home buyers (FHBs).
The Port Macquarie local said that many of her FHB clients are looking at smaller towns outside of Port Macquarie to buy a home.
Similarly, Pakis noted that increased demand from city dwellers moving to the Goulburn region had made it harder for local residents to enter the market: “There’s a lot of local people that are on lower average incomes … so it’s making it harder for regional people to get into the market,” she explained.
She noticed a similar trend to Schuch, stating that regional buyers were now looking at moving further out in the regions to afford a mortgage.
Pakis said, however, that city dwellers moving to the regions was still a positive trend, as it attracts better resources for the community: “It’s a positive thing for some regional areas, because more people moving to the area creates more need for jobs and more services. It’s making the regional towns come back to life in some areas.”
Ritchie had similar sentiments, stating: “This movement in population can no longer be seen as a quirky flow-on effect from the lockdown years. A societal shift is underway.
“This sustained trend provides tangible evidence regarding the importance of investing in and supporting the regions, to ensure communities have the services, skills, and infrastructure they need for their growing populations.”
Bankwest also revealed last week that young Australians are becoming increasingly willing to sacrifice property features to afford a home.
[Related: Young Aussies sacrificing little luxuries to enter property market]
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