Regional migration skyrocketed during Covid: how high property values soared

Australians seeking sea and tree changes during the peak of the pandemic in 2020-21 resulted in regional populations growing more than capital cities for the first time since 1981.

According to the latest Australian Bureau of Statistics (ABS) data released today, regional Australia grew by 70,900. New South Wales led the way in terms of migration, with growth of 26,000 people, followed by regional Queensland with 24,100.

In contrast, Melbourne – which experienced some of the longest Covid-related lockdowns on earth – saw a population decline of 60,5000 over 2020-21. Further, the areas with the largest and fastest decline were all located in Greater Melbourne, including:

• Melbourne (city) declined by 5,900 people (-11%)
• Clayton, in the south-east, declined by 2,700 (-9.4%)
• Inner-city Carlton declined by 2,600 (-10%)

The ABS has noted that capital city population decline – the first ever recorded by the ABS - was “due to COVID-19 related international border closures, and increased movements to the regions”.

Migration: capital cities

Migration: regional Australia

Source: ABS.gov.au

Regional property prices soared during pandemic

A greater demand for regional property as per the above could be one the main driving factors for the sharp increase in regional property values since 2020.

Recent CoreLogic data found that value gains across regional Australian dwelling values “has been almost 40%” since March 2020.

The latest CoreLogic quarterly Regional Market Update, released in February, found that Australia’s 25 largest non-capital city regions experienced “unprecedented increases” in value.

Across combined regions, the median dwelling value jumped 26.1% in the year to January 2022 alone, topping the median capital city dwelling value of 21.3% for the same period.

CoreLogic’s Head of Research, Eliza Owen, said: “Coming off the back of eased lockdown conditions across Sydney, Melbourne and the ACT, regional price growth instead accelerated toward the end of the year, while capital city dwelling price growth continued to slow.”

“This created an unusual divergence between the two markets, where price growth accelerated to 6.3% in regional Australia over the three months to January,” she said.

Highest annual regional house value growth (12 months to January 2022): CoreLogic

1. Southern Highands and Shoalhaven – 38.2%
2. Gold Coast – 36.3%
3. Sunshine Coast – 35.4

Highest annual regional unit value growth (12 months to January 2022): CoreLogic

1. Launceston – 33.9%
2. Sunshine Coast – 31.1%

“Positive interstate migration trends may have acted as a tailwind for these popular lifestyle regions, even amid affordability challenges and fixed rates starting to move higher,” said Ms Owen.

Further, the latest Home Value Index from CoreLogic showed that in the three months leading to February 2022, housing values across the combined ‘rest-of-state regions’ grew by over three times the speed of combined capital city housing values at 5.7% and 1.8% respectively.

Compare home loans in Australia