Younger Australians are striking out in the regions. Where are the hotspots and could it be right for you?

People have turned their backs on capital cities in record numbers during the past year, seeking a simpler and cheaper life in regional Australia.

COVID-19 has not only unshackled workers from CBD offices, but prompted many to reassess what they want from life. And what they want, it would seem, is a smaller mortgage and a bigger garden.

It’s not the first time Australia has experienced a tree change, or sea change shift. But it is the first time younger Australians rather than retirees are leading the charge, turning what was a gradual drift away from cities into a stampede.

In the second half of 2020 the total population of capital cities dropped by a record 21,800 – more than double the same period in 2019, according to the Australian Bureau of Statistics1.

The overwhelming majority of this population drain occurred in Sydney and Melbourne, with millennials (aged 25-44) recording the biggest shift away. Other capitals have held relatively steady, with Brisbane the only one to notch up strong growth thanks to high interstate migration.

Affordability is clearly a factor, alongside lifestyle. In June 2020, when the dramatic shift began, CoreLogic reported the median home value in regional Australia was $394,570, compared to $875,749 in Sydney and $683,529 in Melbourne.

A home among the gum trees

It’s not just price, but bang-for-buck that has had first-home buyers and young families heading for the hills. In the Victorian hotspot of the Grampians, a four-bedroom homestead with panoramic views on 3.2ha sold earlier this year for $625,000. The same outlay in Melbourne would buy a two-bed terrace with a courtyard 10km from the CBD.

There is still plenty of value in the regions, despite demand pushing prices higher. Regional markets outperformed capital cities last financial year, with CoreLogic reporting a 17.7 per cent lift in values across regional Australia in 2021/22, compared to a 12.4 per cent rise for combined capital cities.

Lifestyle-focused coastal areas in NSW and Queensland have boomed, but a break in the drought has also led to strong growth in agricultural areas such as Orange in central NSW and Bunbury in WA.

Regional centres within striking distance of capitals are also popular with workers, who now find they only need to attend a CBD office once a week.

Time for a change?

For anyone daydreaming, or seriously considering making the leap, there’s no shortage of information – there are almost as many tree-blogs as there are tree changers. These blogs offer great insights into what life is really like when you leave the city behind.

While many say their biggest regret is that they didn’t do it sooner, there are some key considerations before farewelling the city.

Driving can drive you crazy: You may not be in a traffic jam, but you will still spend plenty of time in your car in regional and country areas. The distance between things is much greater, so your commute may take longer than it did in the city, although it will probably be more pleasant. Little errands like ducking down to the shops, picking the kids up from school, dropping them off at sport and social activities, and trips to the doctor, can take much longer than you think.

Not everything costs less: Houses may be cheaper, but food and fuel can be more expensive in regional areas. And insurance on that new home may be extremely pricey or even non-existent in more remote, bushfire-prone areas. Be prepared for a rise in some living expenses.

Check the services: It pays to be practical. Research the local facilities and services before deciding on an area to buy. Are there medical specialists or a hospital in the area? On a more basic level, how is NBN and mobile coverage? Sky Muster, the NBN’s satellite broadband service has improved speed, but, again, is a more expensive option.

Food and culture: If entertainment and dining out are important, focus on affordable regions close to food and arts hubs, such as Tewantin, near Noosa on Queensland’s Sunshine Coast. Factor in how far you may otherwise need to travel for a night out.

It can take generations to become a local: Carefully consider the community you are buying in to. How do you see yourself making friends? Be prepared to volunteer or join some local service groups. Getting involved is a win for everyone – you can make friends while contributing to your new community.

Thinking of moving to or investing in the regions? Talk to us about how a tree-change mortgage could stack up.

Top 3 regional growth areas
2020/21 financial year
12-month
increase
Median
value
New South Wales
Richmond Valley – coastal 34.1% $1,070,350
Southern Highlands 28.5% $1,013,445
Orange 24.5% $496,902
Victoria
Gippsland-south west 24.7% $628,774
Surf Coast-Bellarine Peninsula 21.3% $968,102
Grampians 21.2% $254,207
Queensland
Gympie-Cooloola 30.3% $436,199
Noosa Hinterland 30.0% $894,907
Coolangatta 26.4% $910,099
Western Australia
East Pilbara 20.0% $327,227
Augusta-Margaret River-Busselton 7.4% $535,145
Gascoyne 4.2% $297,158
Tasmania
West coast 27.7% $274,315
Launceston and north east 27.0% $403,197
South east coast 25.1% $472,031
South Australia
Fleurieu-Kangaroo Island 17.6% $464,882
Lower north 16.0% $251,765
Murray and Mallee 15.3%% $241,734
Northern Territory
Katherine 12.2% $331,634
Alice Springs 9.1% $442,028

Note: ACT’s limited geography means it does not have formally defined regions beyond Canberra.
Source: CoreLogic

1 Regional internal migration estimates, December 2020, Australian Bureau of Statistics, 11 May 2021.

The post Heading for the hills appeared first on Affinitas Finance.

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