Are regions set to step out of the shadow of cities?
For years it’s seemed that regional parts of our nation have played second fiddle to our capital cities.
Sure, they had more affordable property, but not the “razzle dazzle” that cities can offer, according to some naysayers.
Of course, such generalisations were never correct, but as a nation where some 70 per cent of our residents are city dwellers, it’s not surprising that such thinking became entrenched.
However, post-pandemic it appears that some of our region’s might finally come out of the shadows and even help to drive our nation’s economy recovery.
Investors eye regional locations
Results from the 2020 PIPA Annual Investor Sentiment Survey show that nearly 20 per cent of investors are considering making a move to another location and the majority are seeking regional areas.
The survey found the main reasons for a potential relocation were improved lifestyle factors (78%) and working from home in the future (46%).
However, 28% also said they just didn’t want to live in a crowded city anymore.
The survey results also clearly show that regional locations are set to benefit from plenty of new residents with investors indicating their top locations to migrate to are regional NSW (21%), regional QLD (18%), Brisbane (16%) and regional Victoria (14%).
On top of a desire to physically move themselves, more investors are considering regional locations to purchase property as well.
Indeed, the proportion of investors that say regional markets are the most appealing has increased to 22% in 2020, from 15% in 2019, with coastal locations also on the rise – up to nearly 12% from 8% last year.
The survey results are indicative of the already improving market conditions in many regional locations in my experience.
In fact, we have been active in parts of regional New South Wales and regional Victoria over recent months because of the more favourable market conditions in these locations.
The survey results also show that many of these areas will be welcoming plenty of new residents in the months ahead, which may strengthen property markets in some regional locations.
Rental markets robust
While it’s clear that many investors have an intention to move, or to invest, in regional locations in the future, many areas are already recording strong rental markets.
For example, we recently bought a property on the NSW Central Coast for a client.
We paid just $554,000 for a three-bedroom, one-bathroom house only minutes to the beach which also had a rental appraisal of $450 per week.
Within six hours of listing the property for rent, we received a staggering 12 applications – all sight unseen and before the first open home had even been held.
The property manager was also fielding plenty of interest from people moving from Sydney with about half of the enquiry coming from city-slickers wanting to make a move to the regions.
This robust demand from tenants has resulted in historically low vacancy rates in many regions, which will help to underpin rents in the months and years ahead.
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