Regional Australia Report
The COVID-19 regional shift
November 2020
Author: Nerida Conisbee, Chief Economist Data: Karen Dellow, Analyst COVID-19 has resulted in shifts across many parts of the economy including preferences and demand for housing. Throughout regional Australia, it appears population growth is strengthening more quickly than it otherwise would have in 2020. While these population shifts can't be confirmed until the Australian Bureau of Statistics (ABS) releases its data, we can see parts of regional Australia increasing in popularity on realestate.com.au. Search activity for regional Australia spiked earlier this year, which has since resulted in house price growth.
There are two distinct trends driving up demand for regional property; lifestyle and jobs. As such, there are some areas experiencing far stronger interest than others.
Remote working as a result of COVID-19 is making a lifestyle change possible for some, while strength in parts of the economy that are more COVID-19 resistant than others, in particular mining, is also sending people to regional communities. The pandemic has also accelerated interest in some regional areas that were already very popular prior to COVID-19. Long-term population growth: Regional versus Capital City (2001 - 2019)
Regional population shifts
Population growth has generally been focused in capital cities, primarily because employment and job opportunities have been located in city centres. While long term population growth, and hence housing demand, has been capital city centric, over the past five years, there has been a gradual shift to some parts of regional Australia. Specifically, to areas located on the fringe of capital cities.
It’s not surprising that the swing to fringe locations has occurred most prominently in states with our most expensive capital cities; Victoria, New South Wales, Western Australia and Queensland.
The city of Geelong was the beneficiary of the strongest regional shift prior to COVID-19. Geelong’s population increased by 14% over the past five years, making it a far bigger city than Hobart and Darwin. At an SA4 level, it has been the tenth fastest growing area in the country with only parts of Melbourne, Brisbane and Sydney seeing bigger percentage increases.
Capital City Regional
Source: ABS Biggest increase in population by regional SA4 (2014-2019)
SA4 Areas 2014 2019 5 Year Change
While Geelong has done well, other regional Victorian areas within commuting Geelong 272,154 310,128 14.0%
distance to Melbourne have also seen strong population growth, in particular, Gold Coast 564,952 636,117 12.6%
Bendigo, Ballarat and Latrobe-Gippsland. Sunshine Coast 341,640 384,281 12.5%
Bendigo 150,101 162,918 8.5%
For Queensland, the continued growth on the Gold Coast and Sunshine Coast has Ballarat 155,108 167,552 8.0%
meant that these areas have increasingly become self-sufficient economies, less Mandurah 96,632 103,467 7.1%
reliant on jobs in Brisbane. Latrobe - Gippsland 268,583 286,952 6.8%
Southern Highlands and Shoalhaven 146,585 156,601 6.8%
For New South Wales, the regions abutting Greater Sydney, Southern Highlands and Hunter Valley exc Newcastle 262,919 280,588 6.7%
Shoalhaven, Hunter Valley (excluding Newcastle) and Illawarra have all experienced Illawarra 296,633 314,618 6.1% strong growth.
In Western Australia, Mandurah, the coastal regional area just outside the southern Perth boundary, has seen population growth just over 7%. These shifts to regional Biggest decline in population by regional SA4 (2014-2019) areas at the edge of capital cities have historically been driven by affordability and the ability to buy a better home in a nicer suburb but the longer commute to the city for work has been an issue.
SA4 Areas 2014 2019 5 Year Change
Western Australia - Outback (South) 126,593 116,642 -7.9%
Regional areas have also benefited from additional government spending. Geelong, Western Australia - Outback (North) 102,015 97,963 -4.0% for example, benefited from a number of major initiatives including the Geelong Queensland - Outback 85,254 82,534 -3.2%
City Deal, in addition to $2 billion allocated in the 2019 Federal Budget for a fast rail Northern Territory - Outback 101,725 98,674 -3.0% between Melbourne and Sydney, and first home buyer incentives that favoured South Australia - Outback 86,785 84,407 -2.7% regional Victoria.
Mackay - Isaac - Whitsunday 176,064 173,006 -1.7%
Western Australia - Wheat Belt 138,566 136,928 -1.2%
For the Gold Coast, the construction of the light rail and continued improvements Far West NSW and Orana 117,258 116,962 -0.3% to the Pacific Motorway are likely to be supporting jobs and population growth. Central Queensland 227,014 226,811 -0.1%
Source: ABS Strongest price growth SA4s (2014-2019)
Source: realestate.com.au
While many regional areas have experienced strong population growth, the areas that In areas with high levels of population growth, it is not surprising that we have seen have declined the most tend to be very isolated. This is likely driven by changes to job strong increases in demand and price growth over the corresponding period. creation in these areas. In Western Australia’s Wheatbelt, for example, the automation Tasmania has been an exception, despite not having particularly strong population of the agricultural industry and the increasing scale of farming operations have partly growth, Tasmania’s house prices grew significantly. Price growth was driven driven declines in employment. Surprisingly, however, it has been one of the strongest primarily by a property investment boom, as well as rising wealth from strong regional performers in terms of house price growth since COVID-19. improvements to the Tasmanian economy. Change in views per listing (Mar - Sept 2020)
COVID-19 has led to a significant change in the way that property seekers search on realestate.com.au and it was one of the earliest indicators that there was a shift in preference to regional Australia.
While search activity dropped dramatically in the early weeks of the pandemic, once the third stimulus package was announced, particularly JobKeeper, we started to see buyer activity return nationally. Interestingly, the change in views per listing was higher in regional Australia than it was in capital cities.
Anecdotally, discussions with agents in many regional areas around this time also backed this up. Buyer interest was far stronger than expected.
The standout performer in terms of property seeker activity on realestate.com.au has been Canberra where search activity has more than doubled, likely driven by very strong growth in government employment.
Beyond this, in every state, regional search has grown stronger than capital city search. The most striking differential has occurred in locked down Victoria where search has barely moved in Melbourne while it jumped 60% in regional Victoria. The trends emerging as a result of COVID-19
COVID-19 sparked two distinct trends in regional Australia. The first is the resurgence of the mining sector and the second is the change to the way many are working. The strength in mining is being driven primarily by the stimulus that the Chinese Government has deployed to get their economy moving again, as well as the impact of COVID-19 on other mineral producing countries.
Brazil is the second highest iron ore producer and is also the second most COVID-19 impacted country, which has substantially reduced the nation’s production. As a result, iron ore prices have recently hit record highs and Australia is currently exporting record levels of iron ore.
Other minerals are also seeing strong demand. Gold, often seen as the ultimate hedge against recession, has hit various price records since mid-March, while copper is doing well off the back of China using less copper scrap.
Any regions that have economic growth closely tied to these strong performing minerals are seeing a flow on to house price growth. As an aside, one mineral that isn’t doing so well is coal and any regional areas closely tied to coal are not experiencing the same resurgence in their economies.
The resurgence of mining has created interesting results across a range of metrics that we track on realestate.com.au. Port Hedland in Western Australia now achieves the highest enquiry from first home buyers in regional Western Australia and is the second most enquired area from investors. Townsville has seen some of the strongest price growth since COVID-19 in Queensland, likely driven in part at least, by better performance of nearby mines. Orange, where surrounding expansions of several mines has created many new jobs, continues to appear as one of the most enquired areas from first home buyers and investors.
While mining has created positivity in many regional areas, a more surprising shift has been movement, which appears to be coming from people working differently and wanting more space due to COVID-19 restrictions.
As outlined earlier, there has been a shift to regional areas over recent years as a result of affordability. Moving to cities like Wollongong and Geelong means more expensive housing than in many other regional parts of Australia, but they are within convenient commuting distance to many capital cities so have been popular. The main difference since COVID-19 is that many of the regional areas seeing jumps in popularity and pricing are not within an easy commute.
The most dramatic change has been seen in Bangalow in northern NSW. This suburb is now in the top 10 nationally in terms of views per listing. It is the first time a regional town has appeared in this list since we started tracking views per listing five years ago. More broadly, Richmond-Tweed is one of the strongest performing regional areas nationally in terms of activity on realestate.com.au and that has translated into price growth.
In Western Australia, Margaret River receives the second highest level of first home buyer enquiry regionally after Port Hedland, while Cable Beach is in the top three for investor enquiry in regional Western Australia.
Warrnambool and surrounding towns have experienced the strongest price growth of all regional areas in Victoria over the past three months. Change in views per listing (Mar - Sep 2020)
1 Illawarra 6 Gold Coast The areas set to benefit as demand soars 2 Southern Highlands and Shoalhaven 7 Bendigo
3 Richmond - Tweed 8 Coffs Harbour - Grafton The first COVID-19 lockdown began in March 2020 and the areas that have seen 4 Ballarat 9 Sunshine Coast
5 Newcastle and Lake Macquarie 10 Central West - NSW the biggest jump in viewing activity are a mix of regional areas that were doing well prior to the lockdown such as Illawarra, Gold Coast and Bendigo, all located adjacent to capital cities, as well as some new areas.
Highest views per listing by suburbs in regional Australia, post COVID-19 (Apr - Sep 2020)
Richmond-Tweed was a popular area prior to the pandemic, particularly with Median house price
Average views per listing
renters, but is probably the region that has most benefited from the lifestyle shift New South Wales
Bangalow NSW 2479 $1,050,000 11,451 of white-collar workers being able to work anywhere.
Thirroul NSW 2515 $1,380,000 10,785
Bulli NSW 2516 $1,070,000
9,181
It is likely that Coffs Harbour-Grafton is benefitting from a similar shift. The Victoria
Jan Juc VIC 3228 $933,000 7,056 announcement of the Coffs Harbour bypass in this year’s Federal Budget, will East Geelong VIC 3219 $740,000 6,689 further benefit this part of New South Wales. Newcastle and Lake Macquarie do Belmont VIC 3216 $580,000
6,416
have a mining sector, however, it is reliant on coal, which is one of the minerals that Queensland
Tugun QLD 4224 $710,000 7,137 isn’t seeing buoyant demand. As a result, the increase in popularity is likely due to Burleigh Heads QLD 4220 $856,500 6,363 lifestyle, similar to Coffs Harbour-Grafton and Richmond-Tweed.
Witta QLD 4552 $620,000
6,101
South Australia
Port Elliot SA 5212 $482,500 3,715 In contrast, the rise of Central West New South Wales is likely to be in part driven Goolwa Beach SA 5214 $317,500 3,676 by mining with gold mining a major employer in this part of the state.
Cockatoo Valley SA 5351 $645,000 3,110
Western Australia
Yallingup WA 6282 $1,652,500 2800 At a suburb level, the popularity of lifestyle areas becomes more obvious. Cookernup WA 6219 N/A 2757 Bangalow is a good example and in other states, the trend continues. Seaside Jan Yallingup Siding WA 6282 $1,350,000
2019
Tasmania Juc in Victoria, Gold Coast’s Tugun, South Australia’s Port Elliot, and Western Trevallyn TAS 7250 $406,500 5232 Australia’s Yallingup all offer great beaches and are popular holiday destinations. West Launceston TAS 7250 $410,000 4984
Only Tasmania (Launceston’s Trevallyn) and Northern Territory (Alice Spring’s Launceston TAS 7250 $470,000
4589
Northern Territory Braitling) are not likely to be driven so much by this lifestyle shift.
Braitling NT 0870 $450,000 850
Araluen NT 0870 $505,000 817
East Side NT 0870 $505,000 813
Source: realestate.com.au Note: Median house price is 12 months to September 2020 Highest enquiry from First Home Buyers in regional Australia, post COVID-19 (Apr - Sep 2020)
Type
Median price
New South Wales
Beaches and mining driving First Home Buyer enquiry Wollongong Unit $557,000
Orange House $445,000
Since the beginning of COVID-19 lockdowns, first home buyers have been a Dubbo House
$375,000
positive part of the market with overall enquiry showing strong increases despite Victoria
Belmont rising unemployment. A big driver of this has been high levels of government House $580,000
Wodonga House $345,500 incentive. At a federal level, this includes the First Home Buyer Deposit Scheme and Mildura house
$330,000
HomeBuilder. At a state level, many incentives have been extended and/or Queensland expanded. In some states, these incentives are more generous in regional areas Surfers Paradise Unit $390,000 than they are in capital cities.
Coomera House $538,500
Southport Unit
$350,000
Enquiry from first home buyers in regional Australia on realestate.com.au has been South Australia
consistent with the rest of the market, albeit at cheaper price points. Trends that Mount Gambier House $269,000
were occurring prior to the pandemic have continued. These include the popularity Murray Bridge House $230,000
of the Gold Coast, Wollongong and Geelong. Featuring strongly are beachside Port Lincoln House $297,500 areas including Port Lincoln, Devonport and Margaret River. Western Australia
South Hedland House $199,500
More interesting, are inland towns where it is difficult to commute to a capital city. Margaret River House $471,000
Orange and Dubbo are both large regional cities and are likely to be driven in part Australind House
$360,000
Tasmania by mining, better performance in the agricultural sector (breaking of the drought) Devonport House $296,500 and a lifestyle shift. For Mildura and Wodonga, it is likely to be agriculture (Mildura) Newnham House $315,000 and perhaps defence (Wodonga). Summerhill House
$357,500
Northern Territory
Gillen House $427,500
Larapinta House $405,000
Katherine House $300,000
Source: realestate.com.au Note: Median house price is 12 months to September 2020 Highest enquiry from Investors in regional Australia, post COVID-19 (Apr - Sep 2020)
Type
Median price
New South Wales Lower prices drive demand from Investors Orange House $445,000
Wollongong Unit $557,000
Byron Bay House
$1,568,000 While first home buyers remain very active, investor demand has been far more
Victoria subdued for a long time, pretty much since the Financial Services Royal Mildura House $330,000 Commission kicked off at the end of 2017. For regional Australia, there are a lot of Shepparton House $285,000 similarities between the locations which investors and first home buyers are making Wodonga House
$345,500 the most enquiries on. Orange, Mildura, Surfers Paradise and South Hedland are all Queensland examples of towns that feature in both lists.
Surfers Paradise Unit $390,000
Mooloolaba Unit $920,000
Job creation is generally the driver for investor and first home buyer enquiry so it’s Southport Unit
$350,000
not surprising that the same areas attract both. First home buyers need affordability South Australia
given they are generally younger and in the early stages of their careers. They also Mount Gambier House $269,000
need an income and regional areas with lots of new jobs are attractive. Similarly, Port Pirie House n/a
rental demand is generally stronger in areas with a lot of job creation, so these Murray Bridge House $230,000
Western Australia areas also become attractive to investors.
Dunsborough House $630,000
South Hedland House $199,500 Given the rising popularity of the Richmond-Tweed region, it’s unremarkable that
Cable Beach Unit
$162,000
Byron Bay is the third most enquired upon area in regional New South Wales. Tasmania This is despite a median house price now over $1.5 million.
Devonport House $296,500
George Town House $200,000
West Launceston House $410,000
Source: realestate.com.au Note: Median house price is 12 months to September 2020 Strongest price growth by regional SA4 (3 months to Sep 2020)
Mining regions and beachside areas, far from capital cities, are now dominating price growth Median price
QoQ % change
New South Wales
While search in regional Australia started accelerating soon after the first lockdown Coffs Harbour - Grafton $543,500 8.7%
Mid North Coast began in mid-March, it has taken some time to work out whether it was just people $527,000 8.3%
Richmond - Tweed $680,000
6.3%
locked down, looking for something to do, or alternatively, active purchasers, with Victoria strong intent to buy.
Warrnambool and South West $349,000 5.8%
Ballarat $440,000 4.8%
Price growth data now available is starting to confirm that the search activity we North West $255,000
4.1%
were seeing on realestate.com.au was from genuine buyers looking to make the Queensland
move to beachside areas, far from capital cities. Townsville $327,000 3.8%
Gold Coast $700,000 3.2%
The strongest growth area nationally over the past three months has surprisingly Wide Bay $330,000
3.1%
been the Western Australia – Wheatbelt. As outlined earlier, this is an area that has South Australia seen one of the biggest declines in population over the past decade. Over the past South Australia - Outback $222,500 4.7% three months, this area has seen an 11.7% increase in median house prices, likely South Australia - South East $310,000 1.3% driven primarily by copper (the Caravel copper project is the largest in Western Western Australia
Australia), as well as gold and iron ore. Western Australia - Wheat Belt $352,000 11.7%
Bunbury $405,000 5.2%
Mandurah $378,250
2.2%
The preference for lifestyle locations becomes particularly apparent in the list of Tasmania
New South Wales regional areas seeing the strongest growth. The coastal areas Launceston and North East $375,000 4.0% from the Mid North Coast up to the Queensland border have been experiencing South East $431,000 2.1% strong growth post the pandemic, likely driven by strong interest from people located in capital cities, particularly Sydney.
Source: realestate.com.au Note: The states with less than three SA4s did not have any other SA4s with positive price growth over the quarter Median Sale Price: Median sale price in the last 3 months
QoQ % change: Percentage difference between the median sale price in the last 3 months compared to the same period 3 months ago Strongest price growth by regional suburbs (Sep 2000 - Sep 2020)
2000
2020 % change
New South Wales
Bangalow NSW 2479 $76,025 $1,050,000 1281%
Fletcher NSW 2287 $69,000 $624,000 804%
Glenroy NSW 2640 $47,750
$401,500
741%
Long term growth Victoria
Barwon Heads VIC 3227 $145,000 $1,050,000 624%
Indented Head VIC 3223 $85,000 $605,000 612% It's important to look at the areas that have seen the strongest price growth in
Kyneton VIC 3444 $92,500
$635,000
586%
regional Australia over the very long term. Although, we believe change in search
Queensland and enquiry on realestate.com.au is a good indication of potential price growth, Sunshine Beach QLD 4567 $290,000 $1,950,000 572% analysing other factors is critical. Moffat Beach QLD 4551 $162,500 $945,000 482%
Mudjimba QLD 4564 $140,000
$790,000
464%
Australia’s strong shift to beachside living is apparent from this data, and this trend South Australia has also showed up in the equivalent capital city data. Bangalow, which has been Middleton SA 5213 $107,500 $540,000 402%
the standout performer in terms of search, has also been the standout in price Port Elliot SA 5212 $100,000 $482,500 383%
growth over the long term. The median house price is currently just over $1 million, Sellicks Beach SA 5174 $83,000 $375,000 352% which is an increase of 1281% over the 20-year time period.
Western Australia
Newman WA 6753 $61,100 $225,000 268%
Elsewhere around Australia, similar beachside trends emerge. Barwon Heads in Bridgetown WA 6255 $104,500 $371,000 255%
Katanning WA 6317 $55,000
$179,500
226%
Victoria, Sunshine Beach in Queensland and Middleton in South Australia. In
Tasmania Western Australia, it is the mining town of Newman.
Invermay TAS 7248 $60,000 $330,428 451%
South Launceston TAS 7249 $70,000 $349,000 399%
Launceston TAS 7250 $95,500
$475,000
397%
Northern Territory
East Side NT 0870 $153,750 $505,000 228%
Gillen NT 0870 $143,200 $427,500 199%
Braitling NT 0870 $155,000 $450,000 190%
Source: realestate.com.au Note: Median house price is 12 months to September 2020 Highest views per listing for Regional Australian streets (SEP 2017 - SEP 2020)
New South Wales Suburb QoQ % change
Tobins Rd Mandalong NSW 2264 8555%
Chichester Dam Road Bandon Grove NSW 2420 6695%
Owenia Way Broken Head NSW 2481
5975%
Victoria
Old Beech Forest Rd Beech Forest VIC 3237 6882%
Mcivors Rd Kilmore VIC 3764 5556%
Great Ocean Rd Big Hill VIC 3231
5163%
Queensland
Beachfront Mirage Dr Port Douglas QLD 4877 8088%
The most popular streets in regional Australia Amamoor Creek Rd Amamoor Creek QLD 4570 6178%
Andersons Rd Black Mountain QLD 4563
6017%
While search, views and enquiry data on realestate.com.au gives us a good idea South Australia as to how preferences are changing at a suburb and regional basis and this Broadbent Rd Paris Creek SA 5201 5684% frequently flows through to pricing, similar data at a street level often just shows Horrocks Hwy Gillentown SA 5453 3828% up beautiful streets in desirable suburbs. Most of the streets on the list also contain Signal Flat Rd Ashbourne SA 5157 3785% Western Australia luxury homes. St Alouarn Pl Margaret River WA 6285 4966%
Balingup-nannup Rd Nannup WA 6275 4456%
Song Pl Perup WA 6258
3908%
Tasmania
Winduss Rd Gunns Plains TAS 7315 6148%
Kingsway Launceston TAS 7250 5417%
Myalla Rd Myalla TAS 7325
5261%
Northern Territory
Ilparpa Rd White Gums NT 0870 2198%
Emungalan Rd Emungalan NT 0850 1434%
Wooliana Rd Daly River NT 0822 1273%
Source: realestate.com.au Note: The states with less than three SA4s did not have any other SA4s with positive price growth over the quarter Median Sale Price: Median sale price in the last 3 months
QoQ % change: Percentage difference between the median sale price in the last 3 months compared to the same period 3 months ago In summary
It is the changes to the way we work and a resurgence in the mining sector that are driving a big push into regional areas. While the regional areas adjacent to capital cities have been popular prior to COVID-19, it is the more far flung areas that seem to have benefitted most from the pandemic.
In summary, the main beneficiaries have been:
Areas adjacent to capital cities
• Victoria – Geelong, Bendigo, Ballarat, Latrobe-Gippsland
• New South Wales – Illawarra, Southern Highlands and Shoalhaven, Hunter Valley • Western Australia – Mandurah
• Queensland – Gold Coast and Sunshine Coast
• South Australia – Port Elliot and surrounding region
Remote areas
• Victoria – Warrnambool and the South-West, Mildura and Wodonga
• New South Wales – Central West (particularly Orange) and coastal areas from Mid North Coast up to the Queensland border
• Western Australia – all mining regions and Margaret River region
• South Australia – Mount Gambier and the South-East
• Tasmania – Launceston and the North East
• Queensland – all mining regions (excluding coal)
The information contained in this report is current as at the publication date only. The median sales information is based on Third Party Content (within the meaning of our website terms of use). realestate.com.au Pty Ltd does not make any warranty as to the accuracy, completeness or reliability of the information or accept any liability arising in any way from any omissions or errors. The information should not be regarded as advice or relied upon by you or any other person and we recommend that you seek professional advice before making any property decisions.