As Australians, we love our real estate. The family home is one of our most treasured possessions; a place to build our lives, raise families and create fond memories. However, the coronavirus pandemic has had a significant effect, not just on Australia’s economy but also upon our future plans and the way we think about where we want to live.
Since March, much has changed.
During the country’s first lockdown, many Australians lost their jobs, more began working from home and workplaces gained flexibility. And with more time at home to think about what’s important in life, many of us started thinking about what life might be like if we left the city for that tree change or sea change we’ve long talked about. Others have decided it really is time to downsize, and, countless families have come to the realisation that they need more room – that putting it off can’t wait. Additionally, thousands of first home buyers, buoyed by the Morrison Government’s HomeBuilder $25,000 grant, determined that now is the time to take their first steps on the property ladder. This has all added up to thousands of Australians seeing the Sea Change or Tree Change we’d considered as something further off in the future as something we should act upon now.
Market demand takes off despite Covid-19
While homeowners were reluctant to sell in April and May and when COVID-19 really made its presence known, First National members saw buyer demand bounce back strongly through both months, particularly across regional Australia. In fact, some of our estate agents in regional Victoria recorded levels of transactions exceeding the best months they’d experienced in the past 20 years.
Pre-sale activity from homeowners also reflects rising confidence that the worst pandemic predictions of economists back in March look increasingly unlikely to be realised. Then, the Big Four banks were predicting house price declines of between 10 and 30 per cent, which they have all since been walked-back.
April housing data showed a rise in average house prices nationally of 0.3%, followed by a fall of 0.4% across May and a further 0.7% in June. Despite these incremental falls in prices, home prices in affordable prices ranges in fact increased across the country, with most of the declines having been realised at the top end of Sydney and Melbourne’s prestige property markets.
In annual terms (at the time of writing), six of our eight capital cities still have house prices higher than a year ago - Sydney, Melbourne, Brisbane, Adelaide, Hobart and Canberra. Only Darwin and Perth have lost ground, by 1.5% and 2.5% respectively.
CoreLogic data reveals the pre-listing activity of real estate agents is on the rise, nationally - suggesting more property will be available for purchase come spring. This aligns with recent data from removalists indicating Australians are interested in leaving COVID-19 hotspots and moving to regional areas; acting upon long-held desires for a Sea Change or Tree Change.
In some cases, the motivation is driven by job losses or downsizing of businesses, but a majority is being driven by a simple desire for a smaller mortgage as well as more space, independence and a better lifestyle. Sydney is the city people most want to leave as they seek lower-priced areas and improved lifestyle. Melbourne is next in line, with those seeking to leave most inclined to head to Queensland or Victoria’s regions.
What can we expect for the real estate market beyond Covid-19
Prior to 2020’s pandemic, regional Australia property markets had been consistently showing steady capital growth for several years. COVID-19 has served only to accelerate that trajectory, with first homebuyers seizing the opportunity Federal Government’s $25,000 HomeBuilder Grant, families seeking a better lifestyle, and young retirees looking for better value.
Even though housing values in capital cities have demonstrated remarkable resilience, the results for regional Australia are considerably more bullish. For the June Quarter, Domain data records price rises in Victoria, New South Wales, South Australia and Tasmania – while in annual terms, there are increases in Tasmania (12%), Victoria (7%), NSW (6%), South Australia (4%), the Northern Territory (4%) and Western Australia (2%). Queensland was the only state to record an annual decrease (less than 1%).
Of course, Victoria’s set-back and reimplementation of Stage 3 and 4 restrictions will dampen economic recovery and is likely to amplify some further declines in home prices over the coming months. That, however, will likely only serve to strengthen the desire for change, when change is possible. Apart from areas that are heavily reliant on international tourism, most regional economies are travelling quite well and some are thriving, thanks to components of the local employment sector. Agriculture, viticulture, mining, medical services and food services are amongst sectors doing quite well, thus far.
The desire for a more affordable lifestyle is not a new trend; it has simply been strengthened by the effects of COVID-19. Regional areas within a two-hour radius of capital cities are anticipated to see the greatest increase in buyer demand, as people trade city homes for less expensive locations within easy reach.
So, if you’re amongst the large number of Australians thinking seriously about a Sea Change or Tree Change, now’s the time to start talking to your local First National Neilson Partners Real Estate agent about where you’d like to move to and what you need to consider.
Prices are rising regionally and this trend will continue to advance as restrictions are relaxed. Our Lifestyle Specialists are trained to help you complete the process of selling your home and buying the next one, from end to end. We’ll help you maximise your sale price, then connect you with the support you need to find the right home for you by the sea, or by a tree!
Making the change isn’t hard, but there are certain things you should consider and mistakes you don’t want to make. Contact us to see how you will make the move smoothly, swiftly and successfully.
