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Will the regional shift take pressures off property prices?
The COVID-19-induced regional exodus is spurring on new economic markets further away from the cities, while potentially alleviating congestion and housing affordability issues that Australia’s capital cities face, a new study has shown.
Will the regional shift take pressures off property prices?
The COVID-19-induced regional exodus is spurring on new economic markets further away from the cities, while potentially alleviating congestion and housing affordability issues that Australia’s capital cities face, a new study has shown.
Findings by The Australian Housing and Urban Research Institute (AHURI) show a shift from metropolitan areas to regional hubs may create an opportunity to rebalance Australia’s population growth. However, regional hubs will need to be well planned to accommodate this trend.
The study comes as housing prices in Australia’s metropolitan areas continue to rise, with the latest CoreLogic data showing the average capital city prices are now 13.4 per cent above their previous record high in September 2017.
According to CoreLogic’s research director, Tim Lawless, this is the fastest annual pace of growth in housing values since the year ended July 1989.
Mr Lawless explained: “Through the late 1980s, the annual pace of national home value appreciation was as high as 31 per cent, so the market isn’t quite in unprecedented territory.
“The annual growth rate at the moment is trending higher; in fact, it is 3.6 times higher than the 30-year average rate of annual growth.”
CoreLogic’s data shows the increase equates to $103,400, or $1,990 per week, putting pressure on affordability.
At the same time, Australian wages rose at an average rate of 1.7 per cent, meaning property is outstripping wages by almost 11 times.
While many Australians are heading for regional areas, the AHURI believes this is creating an opportunity to redress some of the affordability issues.
“The shift to the regions could be the precursor to a rebalancing of Australia’s settlement and population growth, but it needs to be planned for, with the current housing crises in the regions something that needs to be worked through to ensure that the long-term benefits of a more balanced urban and regional settlement pattern can be sustained,” lead author Nicole Gurran from the University of Sydney said.
The research highlights the importance of infrastructure, transport and telecommunications infrastructure in attracting and sustaining employment and population in regional areas.
“They all benefited from being close to a larger state capital city or, in the case of Albury-Wodonga, from being an important transport and logistics interchange on the NSW and Victoria border,” the professor said.
“In addition, they all have important regional service roles as administrative headquarters for local and sometimes state, services, and health, education, commercial and retail services.”
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