Regional areas of Australia have become far less affordable, according to the Housing Industry Association (HIA).
Their study for the final quarter of 2020 showed movement away from the cities during the COVID-19 pandemic, allied with a lack of inward foreign migration and a general rise in house prices had made life in the country more expensive.
The HIA’s Affordability Index is a regular study published by the industry body that compares the prices across Australia’s 8 capital cities, as well as a host of regional areas, based on house prices, mortgage rates and household incomes.
The early data from the post-pandemic era suggests that there was a general trend away from the cities, with people who could work from home permanently choosing to leave metropolitan areas in favour of more space, as well as those who chose not to return to the workforce taking their retirement earlier and thus move out.
“House prices in regional areas were a key driver of the fall in affordability,” said HIA Economist Angela Lillicrap. “COVID-19 has caused consumer preferences to shift towards detached housing and regional areas and away from inner city living. The newfound capability to work from home has also enabled homebuyers to look at locations that previously would have been considered too far from their workplace.”
“This increased demand has been met with a low supply of homes on the market which has led to strong price increases, particularly in regional areas. This trend can also be seen in the rental market with very low vacancy rates in many regional markets. As prices continue to rise, more sellers will put their homes on the market. which will help to keep a lid on prices.”
“It is likely that much of the shift in population that occurred in 2020 will be permanent. Sea changers, tree changes and retirees used 2020 as an opportunity to pursue their dreams. When ’normal’ does return, however, it is likely that young students and workers will once again move to the capital cities for employment.”