Are more people likely to move to regional areas in 2021?

{Note from mods - this thread continues from here: Are more people likely to move to regional areas?}



The ripple effect is quite pronounced throughout regional Australia:

Byron Bay...Lennox Head.

Noosa Heads...Coolum Beach.

Gold Coast...Hervey Bay.



Byron Bay house prices have soared and buyers are looking nearby instead

 

Time for Planners to start doing some planning in the regions perhaps?

''New Covid outbreaks are forcing people out of Sydney and to regional areas to work from home – and government planners are worried.''

Covid scares cause Sydney house prices fall as property prices in regional areas hit record highs | Daily Mail Online

 

So the NSW Government last week published a report that essentially suggests population growth in regional NSW may stay at elevated levels for the foreseeable future?

The report also sets out findings that "were deeply concerned for Sydney's economic future."

No news to me at all...

But perhaps others...who perceive COVID to be an insignificant blip on the proverbial radar...need to adopt an objective standpoint, embrace reality to a much greater extent and thus understand that the next few decades will be very different to the previous in terms of the fundamentals of property supply and demand.

 

Changes in house prices reflect changes in supply and demand.

For the majority of the population demand has always been greatest near the capital cities. That’s reflects the intrinsic human nature of most people wanting to be near higher paying jobs, family, schools, entertainment, lifestyle and infrastructure.

Why fight the major trend/tide?

COVID or the next nasty pandemic won’t shift this fundamental human desire long term. There will be some outliers (are people still going off the grid?) but the masses will do what the masses have always done.

Australia is a relatively young nation. Look abroad and it might offer some glimpses into how we may evolve as a nation. What I see is more densification and agglomeration of services and infrastructure in the city centres. Basically more of the same.....

There will certainly be some outlier regionals that outperform the major capital cities over the next two decades. Absolutely. Just as it has in the past. However as whole highly unlikely that regionals will outperform the capitals in my opinion.

For my investment strategy going the safer and more likely route and not fighting the tide makes more sense.

 

The major trend/tide?

The major trend/tide has shifted course dramatically in 2020...thanks to that insignificant little sniffle (aka COVID-19).

The USA, UK, Canada and Australia will thus never be the same again in terms of the pivot from the capital's to the regions.

I understand that it's still early days and people are hoping that life continues as it has in the past.

But it won't.

The world will push towards a more virtual existence; far less emphasis on face to face interaction; far more WFH; far more online retail; far less need to live in a capital city; so far less demand for property in capital cities and far more demand for property in the regions.

Big business is already poised to take advantage of the paradigm shift from the capital's to the regions.

The little man stuck in the past will be the loser...as always...so nothing new in view of the above I suppose.

 

You must have been reading "How to win friends and influence people"! Getting your point of view across in these 300+ posts is as impressive and succinct as I have ever seen any posters on this forum ever achieve. Congrats are in order!

 

I didn't collate and publish the data and/or provide the commentary within the numerous articles in this thread.

I understand that shooting the messenger is commonplace when our reality is threatened though.

Further, the man that discovered gravity and thus announced the world was actually round...and not flat...wasn't very popular at the time either.

Clinging to the past instead of understanding the future and thus capitalizing on opportunities...when the manner in which humans have lived and worked is fundamentally changing on a global scale...isn't a prudent strategy, however.

 

I don't think anyone should compare their "house price predictions" to the mathematician/physicist who discovered gravity...

No one can argue the regionals overall have had a better return in 2020 than capitals (when combined). But Canberra, Darwin, Hobart & Adelaide have all enjoyed comparable, if not better returns than regional areas. Darwin is significantly the best performing area in the last 3 months, both capitals & regions combined. Perth is predicted to have 15-20% growth next year. What we are most likely seeing is areas that have underperformed over many years are increasing due to their perceived value, cheap money, low interest rates, tightening vacancy rates and low levels of stock. This is called a property market cycle.

More people will likely move to regional areas and there's no doubt regional areas are on the upward trajectory of this cycle so there's money to be made, but investing in regional areas will continue to remain riskier than buying in established areas in capitals.

 

I expect Core Logic to publish data early next week that demonstrates further regional outperformance.

And due to the recent clusters in Sydney and Melbourne...I highly doubt that any capital city will perform as strongly in 2021 as commentators have recently forecast either.

 

I don't disagree that many regionals will do well. In my patch on the Gold Coast listings have been tight and anything with reasonable expectations is flying off the shelves.

Capitals will not come undone though. The only stuff that will pull down and skew medians to the southside are fresh air apartments in the cities especially Sydney and Melbourne. Sky units in one of 200 hundred clusters are doomed for a while, say five years or so. I think houses (on land in the middle burbs 5-25 km rings) to perform very well moving forward with a possible six month or so pause this year when job keeper and the like are unwound. It will be a run away train in most of Australia for the next 3-4 years. Main reason......... money is nearly free.

 

I sincerely hope that you are right...and most of Australia performs comparatively well over the next 3-4 years.

In saying that, however, COVID is still causing such havoc in the USA, UK and numerous other nations as well; at a global level things are less than good.

So there are still major downside risks...despite the fact that rates are at historic lows.

 

Over 8 million for a house in the middle of no where and more than 1,700 km from the nearest capital city?

Australia is indeed an interesting country:


''The record for a home sale in the idyllic far north Queensland town of Port Douglas has been smashed with one of the country’s most luxurious hilltop estates fetching more than $8 million.''

Luxury estate sale sets new record for Port Douglas housing market - realestate.com.au

 

No surprises here...

 

It’s less than an hour from an international airport which has some of the best connectivity in the country including some capital cities.
There are only a handful of properties on that hill with those kind of views, all located in a tropical paradise. Significant amount of wealthy retirees living there. Price shouldn’t surprise.

 

@Greedo, just let him keep going

 

From your link:
"Records show Mr Morris sold the house in May 2000 for $4.6 million to tourism company Quicksilver Connections, but then bought it back again in 2007 for $10 million..."

So he first sells the house for $4.6m in 2000 and then purchases it again for $10m in 2007! Then sells it for $8m 13 years later - at a loss of 20%! Gee- the market is really HOT.. NOT!

During the same time frame (2007-2020), Capital cities (minus Perth) median is up by >100%!

 

You are making way too much sense! I thought this thread was for comedic relief (and to push down cap city prices so someone will bite on my low ball offers - no luck yet)

I am kidding great reading all.

 

''According to Domain, the median house price in Byron Bay is now more than $1.44million, which is up 22.8 per cent from last year.''

''But even those more humble towns are seeing property prices soar, with prices in Lennox Head going up 44.7 per cent. Pottsville has a median house price of $780,000, up from $500,000 five years ago.''

Byron Bay: The 'secretly rich' - not celebrities - are pushing up house prices | Daily Mail Online

 

''Newcastle and Lake Macquarie property prices have surged 9% in a year, smashing increases in metropolitan markets.''

Property prices up 9pc in a year in Newcastle, Lake Macquarie

 

I 100% agree with this.

The whole "Covid has changed life forever" mentality is very short sighted.
Humans have very short memories. One day Covid will be gone, or will be manageable like Influenza and life will mostly, not entirely, go back to how it was.

Speaking with informed people in my network which includes CEOs, MDs, owners of recruitment companies and an upper level manager from one the worlds largest tech companies. Work from home will be more common than pre covid, however it will not be 5 days. The consensus seems to be between 2-4 days.
No one that I have spoken to is thinking 5 days. Not one.

So whilst the idea of moving to regional areas sounds appealing, when you have to either long-range commute 2-4 days a week or have a bolt hole in the city, either way spending a lot of time away from family, the reality becomes less appealing.

I'm sure there are a handful of companies that will do 5 day work from home, but the overwhelming majority will not.

I actually think the majority (not all) of the purchases are being fuelled by retirees who have been contemplating the idea for a long time but never did. Covid gave them the reason.
I have no data to back this up, I just can't understand professionals selling up in Sydney to buy in Byron expecting to never again be expected to spend a significant amount of time in the office... but hey, maybe they are...