John McGrath – Regional population growth highest in 40 years
The choice of where to live for Australians has been profoundly impacted by the pandemic and the opportunity to work from home permanently, with new population figures showing that for the first time in 40 years, our regions had greater population growth than our capital cities in FY2021.
The population surge in the regions was largely due to people moving from the cities to coastal and country locations, according to the Australian Bureau of Statistics report released this month.
This occurred because people saw no reason to stay in the capital city markets if they didn’t have to be close to an office anymore. They looked to the regions for more affordable housing and a lifestyle change, with the greatest population gains in regional NSW, regional Queensland and regional Victoria.
This same trend caused an overall decline in Australia’s overall capital city population for the first time ever. The greatest capital city population losses were in Melbourne and Sydney – not only due to regional relocations, but also the international border closure shutting down overseas migration.
The exodus from Sydney and Melbourne to other capital cities or the regions is clear.
Sydney experienced a net population loss of 34,849 solely due to internal migration, which the ABS defines as movement between and within states. The overwhelming majority of departing Sydneysiders moved to regional NSW, with the most popular areas being the Illawarra, Hunter Valley (ex-Newcastle) and the Mid North Coast.
Melbourne had a net loss of 33,501 people through internal migration, with the vast majority going to regional Victoria – primarily Latrobe-Gippsland and Geelong. Regional Queensland also welcomed large numbers of Sydneysiders and Melburnians, with most of them settling on the Gold Coast and Sunshine Coast. Brisbane was also a favoured destination. Those who left Brisbane for a regional lifestyle also overwhelmingly chose the Gold and Sunshine Coasts.
The new data doesn’t go into the age demographics of regional relocators, but we know from earlier data as well as feedback from our agents that millennial families are swooping on regional towns.
The millennials are the first generation to experience the affordability struggle en masse in Sydney and Melbourne. Home ownership wasn’t easy to attain for earlier generations, but it was within reach far earlier in life than it is today for the average young person. So, the opportunity for millennials to move to an affordable regional market whilst maintaining their big city jobs and salaries has proven irresistible.
Research conducted by McCrindle last year found younger Australians are driving the rise of the regions. Young people are more likely to consider moving away from cities whilst retaining their city jobs than older Australians (59% Gen Z, 56% Gen Y, 46% Gen X, 19% Baby Boomers).
This makes sense given the Gen Zs and Gen Ys are either in or approaching their family-forming years, so they’re more likely to want larger houses with backyards for their kids to enjoy. It’s difficult to afford that type of property in Sydney and Melbourne but it’s relatively easy in the regions.
Not surprisingly, the McCrindle research also found that young people see the ability to own more land (48% Gen Y, 35% Gen Z, 36% Gen X, 28% Baby Boomers) and live in a house instead of an apartment (42% Gen Y, 35% Gen Z, 30% Gen X, 35% Baby Boomers) as the best elements of regional living.
As discussed in our McGrath Report 2022, working from home and regional living is giving millennial families the chance to provide their kids with the same ‘luxuries’ they enjoyed as children, such as big backyards and their own bedrooms.
Ironically, the rush to the regions for affordable housing is actually causing affordability to decline. Property prices in the most popular areas are increasing rapidly due to the population inflows.
CoreLogic recently released data for the 12 months to December 31, 2021 showing regional median house price growth on the East Coast. Home values rose the most in the following areas:
- Cobar NSW up 61.4% to $187,500 (mining town)
- Central Highlands, TAS up 56.3% to $250,000
- Kiama, NSW up 43.6% to $1,440,000
- Ballina, NSW up 40% to $1,050,000
- Byron, NSW up 39% to $1,667,500
- Hepburn, VIC up 38% to $750,000
- Cessnock, NSW up 35.9% to $530,000
- Towong, VIC up 35.9% to $312,500
- Snowy Monaro, NSW up 34.8% to $510,000
- Tweed, NSW up 34.8% to $950,000
Such rapid price appreciation might mean that millennials will expand their search to other lesser-known regional areas in the future.