The Covid pandemic sparked a wave of lifestyle changes across Australia, as buyers traded the hustle and bustle of city life for regional areas. Now, new data shows buyers are selling up and moving back to the city.
Peter Li, General Manager of Plus Agency in NSW, has observed this shift firsthand and said the change in consumer preferences is here to stay.
“When Covid happened, everybody wanted to own big acres. They wanted to go out into the countryside and ride a horse in their own backyard,” he said. “But now, I’ve even got two vendors who came to me and said, ‘I want to sell. I want to move down to Upper North Shore, or close to the city.’ They just want to get out of the countryside and move somewhere more metropolitan.”
Mr Li also discussed how this change is impacting developers and land prices. “I’ve had a lot of calls from developers saying, ‘Oh, I should have bought so much regional land, and now I’m stuck with it.’ The demand isn’t there anymore, and that’s obviously affecting the price.”
Another issue, according to Mr Li, is the slow processing of development approvals in regional councils compared to metro areas.
“Regional councils are very slow in processing subdivision and land division approvals, and once Covid finished, people realised public transport isn’t convenient. They’re asking, ‘Why would I pay to live so far away if I can’t work from home anymore?’”
These sentiments reflect broader trends seen in the 2023-24 financial year (FY24), where housing approval data revealed a sharp rise in new house approvals in metropolitan areas, while regional areas experienced notable declines, said Qi Chen, CEO and co-founder of Openlot.com.au.
“There’s a shift of gravity back to the big cities. The Covid-era dream of living in a tree change or sea change town has lost its lustre. People today want to live as close to the capital city as they can, while still having a house.”
In Perth, new house approvals surged by 24.6%, while Western Australian regional areas saw a decrease of 1.1%. Brisbane experienced an 8.8% rise in new house approvals, while regional Queensland saw a 9% decline. In Melbourne, new house approvals climbed by 2%, but regional Victorian areas like Ballarat and Warrnambool experienced sharp drops, with Ballarat’s housing approvals down by 32.7% and Warrnambool by 24.5%.
This pattern is repeated nationwide, as more Australians gravitate towards the major cities. Sydney and Adelaide both saw decreases in new housing approvals, but the declines in the cities were significantly smaller than in their surrounding regional areas. For example, in South Australia, Adelaide’s new house approvals fell by just 5.6%, while regional South Australia experienced a more severe 13.2% drop.
Even with this growth, the uneven distribution of housing development has raised concerns about infrastructure.
“In areas like this and Western Sydney, the infrastructure needs to catch up. Roads need more lanes. Schools need to be built ASAP. Childcare needs to be constructed. And even buses are lagging behind, and many areas don’t yet have a bus line,” said Mr Chen.
Despite these hiccups, Mr Li does not see buyers heading back into regional areas en masse any time soon.
“Unless there’s another Covid, I don’t really see the regional areas booming again,” he said. “Humans are social animals; we want to live in a community with convenience, which is what modern society is about. There may be some investment opportunities in regional areas, like in Hunter Valley, where people buy properties for holiday homes or Airbnb rentals. But as far as permanent homes go, I just don’t see any growth.”
