This time last year, most of us were facing a holiday period at home because of lockdowns and closed borders.
For us Sydneysiders, the opportunity to even head a few hours’ north or south was not really on the table.
However, this year, life is resembling something a bit more like normality, with car boots currently being packed with umbrellas, eskies, and surfboards.
The past year has shone a light on lifestyle locations like never before – even when most of us couldn’t visit them.
In fact, official data is reporting a consistent exodus away from the Harbour City to regional locations around New South Wales quarter-on-quarter, as more people chase lifestyle now that they can work from home, but as they also search for housing affordability.
Regional locations within a few hours from a capital city have been recording the best migration results due to the strong demand from homebuyers and investors.
Regional market boom
According to CoreLogic, cheap access to credit, the newfound popularity of working from home, and an affordability advantage, has all contributed to Australia’s 25 largest non-capital city regions achieving a record increase in house values in the past year.
CoreLogic’s latest Regional Market Update found that of the 25 regions analysed, 24 recorded double-digit annual growth for house values.
Incredibly, seven regions recorded a lift in house values of more than 30 per cent for the year ending October 2021.
The research found that the top performing regional areas were all coastal or lifestyle markets generally within a two-hour commuting distance of a capital city due to the surge in demand for lifestyle properties that offer a blend of liveability and commutability.
However, while these markets have experienced such a strong uptick in prices, they still generally remain more affordable than Sydney.
For example, the median house price in the Illawarra region, including Wollongong, is about $977,000 and the median price of units is about $657,000 – even after a year where it recorded price growth of nearly 30 per cent for houses and 23 per cent for units, according to CoreLogic.
Likewise, in the Hunter region, including Newcastle, where the median house price is about $817,000 and the median unit price is about $624,00.
Demand remaining high
While some markets, such as parts of Sydney and Melbourne, seem to be moderating, the demand situation in lifestyle locations, including the Central Coast, remains elevated.
There is no question that homebuyers and investors continue to show interest in strategically purchasing property within a few hours’ commute of Sydney.
For some, it is because they will be working from home more often than not in the future and are prioritising lifestyle since they no longer need to live in the city.
For others, it is the opportunity to secure a holding near the coast, which they intend to use as an investment property until such a time as they retire there themselves.
In the interim, they can benefit from excellent cash flow as well as the potential for solid capital growth.
Of course, not all regional areas are created equally, with diverse economies being just one non-negotiable for anyone considering purchasing in non-capital cities.
While the supply of new listings in Sydney and Melbourne is increasing, the same can’t be said for areas such as the Central Coast, Newcastle, or Wollongong.
In fact, those property markets are still generally suffering from more demand than supply with many people – apart from those of us with strong local agent networks, I might add – regularly missing out on purchasing, which I doubt will be a situation that improves anytime soon.