Regions benefit from city exodus

New data released from the ABS shows that more than sixty-thousand people departed Sydney and Melbourne to other parts of the country in the twelve months to March 2021.

HIA’s Chief Economist Tim Reardon said that the exodus of residents from Melbourne is a trend that has emerged following the COVID recession with more than 32,000 residents departing in the year to March.

“This shift in population is also the main driver of the tight rental market that exists across the country, other than in Sydney and Melbourne,” Mr Reardon said.

“Regional areas have seen a greater increase in building approvals than capital cities as the population shifts toward lower density areas.

“The 220,000 building approvals in 2020/21 is the most in a financial year since 2017/18.

“Given that the population is moving interstate and building new homes it is unlikely that they intend to return to Sydney or Melbourne.

“The shift in population out of Melbourne is a new trend and one that is compounded by the loss of overseas migration that has underwritten economic growth in Victoria for the past decade.”

Agents specialising in regional Victoria properties are seeing the results of the exodus firsthand, as buyers from the city snap up regional properties in a flurry.

HF Richardson Geelong Sales Manager Matt Poustie said that the recent statistics are not surprising as the regions continue to be a focal point for Greater Melbourne investment.

“From a local standpoint we are seeing low stock levels across most segments of the market which includes Geelong residential, coastal and rural lifestyle properties,” Mr Poustie said.

“This is due to ever-increasing buyer activity so we don’t anticipate any correction in price growth during 2021.

“It’s certainly been a unique 18 months in the property industry with significant price increases bucking the trend of the economy as a whole, but with our region in the spotlight, and certainly in-demand, we do expect another bumper spring selling season to occur in the coming months which should give confidence to prospective vendors.”

ABS housing finance data which was also released shows that there were 94.4 per cent more loans issued for construction of a new home than in the previous financial year which is the most loans ever issued for construction in a 12-month period.

HomeBuilder and other grant programs have also ensured that there were more loans issued to first home buyers in 2020/21 than in any previous financial year.

Building approvals and issuing of loans for construction did fall in the month of June 2021, confirming that the bulk of new projects initiated under HomeBuilder have passed the last regulatory hurdles.