The latest COVID lockdowns have strengthened the appeal of larger houses and a coastal or regional move for many property hunters, with some now looking even further afield for their next home.
The long lockdowns in Australia’s biggest property markets of Sydney and Melbourne have reinforced the desire for more space and a lifestyle shift during the pandemic, realestate.com.au director of economic research Cameron Kusher said.
“We’re seeing a lot of interest in houses as opposed to units and coastal locations or tree-change locations as opposed to capital city properties,” Mr Kusher said.https://imasdk.googleapis.com/js/core/bridge3.484.0_en.html#goog_873682438Play Video
What people are searching for during lockdown01:51
Mr Kusher said search volumes on realestate.com.au have held up strongly during the lockdowns in Sydney, Melbourne and the ACT.
“The demand for outer capital city and regional property is the highest it’s ever been,” he said.
“COVID has driven this big push for people to look for properties in regional Australia.”
The three biggest search trends during the latest lockdowns are consistent with those throughout the pandemic, led by people looking for larger properties.
“We’re seeing more searches for properties with at least three bedrooms, regional properties is probably the number two trend and then houses as opposed to units is the third biggest trend at the moment,” Mr Kusher said.
Being stuck at home during lockdowns and the shift to working from home or hybrid working models have been major influences on the search trends.
“Borrowing costs are low so people can spend more on a home and with more time spent at home, space and lifestyle are increasingly important considerations,” Mr Kusher said.
Space and lifestyle have become increasingly important considerations during COVID. Picture: realestate.com.au/buy
Buyer demand, which hit a record high in August based on the number of views per listing of properties for sale on realestate.com.au, and low supply have been driving rapid increases in property prices.
“Prices are pushing higher not just in the capital cities but also in regional areas where housing is typically a lot more affordable than it is in capital cities,” Mr Kusher said.
Property prices nationally increased by 20.8% over the 12 months to August, according to realestate.com.au data. Combined capital city prices rose 19.3% while combined regional area prices jumped 25.1%.
Mr Kusher said whether the COVID-driven trends continued would depend on what businesses did longer term.
“If businesses allow people to continue to work remotely then we’ll probably see demand in regional Australia remain quite strong,” he said.
“But if businesses start to demand people come back into the office on a more regular basis, then we’ll probably see a swing back into those inner-city areas because if you’re commuting to the office every day it’s a lot easier when you’re close to the office than it is when you’re further away.”
COVID shifts drive in-vogue areas
The pandemic and lockdowns have changed what people are looking for in a property as people reassess their living arrangements.
“Before lockdowns capital city properties were really the most in vogue and in demand,” Mr Kusher said.
“Inner-city properties in particular were very popular and units were a lot more popular than they are now as well.”
The ability to work from home during COVID has allowed many people to make a sea change or shift to regional areas, while serious buyers have also been focusing on outer suburbs within commuting distance to CBDs.
Many people are searching for a sea or tree change during COVID, with places like Byron Bay in hot demand. Picture: realestate.com.au/buy
Mr Kusher said some of the most popular areas in Victoria in terms of views per listing during lockdown were the Mornington Peninsula and Melbourne’s outer east, as well as regional areas like Bendigo, Ballarat, Geelong and the Surf Coast.
He said in NSW, outer Sydney suburbs were also attracting strong interest, including the outer west and Blue Mountains plus the outer south west.
“The Southern Highlands is particularly popular at the moment,” Mr Kusher added.
“Another very popular location in NSW is the Richmond-Tweed area, which of course includes Byron Bay, which is one of the hottest housing markets in the country at the moment.”https://flo.uri.sh/visualisation/7389800/embed?auto=1
The latest realestate.com.au data showed the regions attracting the highest views per listing during August were Sydney’s Northern Beaches (6670 average views per listing), the Mornington Peninsula (5315) and Hobart (4813).
Property hunters also looking further afield
Mr Kusher said the data showed interest in locations further away from capital cities had increased.
“Initially it was areas pretty close to the capital cities and now we’re starting to see some of the demand move into areas a little bit further afield,” he said.
“They’re places where you probably can’t commute back to the office in the capital city if you were living there.”
There has been increased interest in properties in places like Cairns in Far North Queensland. Picture: realestate.com.au/buy
Mr Kusher said there had been a big increase in interest in Queensland’s Wide Bay and Cairns, with average views per listing in those regions rising by 101% and 90%, respectively, in August compared to a year earlier.
Regions like Coffs Harbour-Grafton on the NSW north coast (up 107% year-on-year) also recorded a strong increase in interest.
Mr Kusher said there had also been a lot of interest in the Warrnambool and south west region in Victoria this year, with average views per listing up 103% year-on-year.https://flo.uri.sh/visualisation/7389823/embed?auto=1
Mr Kusher said demand for the locations further away from capital cities was potentially coming from a number of sources: people close to retirement who may be choosing to buy now; people looking for a second or holiday home; and people who expected their job could be done remotely into the future.
Ray White Warrnambool sales consultant Chris Thomas said since COVID started, there had been an increase in people from Melbourne, Geelong or further afield looking to move to Warrnambool.
“They may have been looking to do something at some time in the near future anyway and it just probably sped up people’s plans,” Mr Thomas said.
Mr Thomas said the demand was coming from a mix of people looking for a new home, such as retirees, as well as investors attracted to the strong rental returns.
“We’ve certainly seen more investors from outside of the area looking to purchase but we’ve also got people who are looking for homes that they will rent in the short term with the view to retire or move into down the track as well.
“Obviously being a seaside town as well there are people looking for that sea change,” he added.
Mr Thomas said Warrnambool had long been viewed as more of a tourist destination, but also had major industries providing employment for its population of 35,500.
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Retirees, investors and people wanting a sea change have been attracted to Warrnambool. Picture: realestate.com.au/buy
While Warrnambool is 257km from Melbourne at the end of the Great Ocean Road, Mr Thomas said remote working had made it more viable for people to live further away from a capital city.
“It’s been a bit of a hidden gem for a long time. Previously it’s been seen as being probably a bit too far away from the capital city.”
Warrnambool’s median house price currently stands at $450,000 according to realestate.com.au data.
“It’s still very feasible for people who are moving from the city,” Mr Thomas said.
“They can pretty much still have the pick of what they want down here.”
COVID boosts demand for larger properties
There has been an increase in the number of searches for properties with at least three bedrooms over the past year, which Mr Kusher said highlighted the growing desire for more space.
The latest PropTrack Housing Market Indicators Report showed 68.2% of filtered searches on realestate.com.au for properties for sale in August were people seeking a minimum of three bedrooms.
“We’ve seen more searches for properties over $1 million than we’ve ever seen before,” Mr Kusher added.
“Prices are higher so there is more supply above $1 million, but equally people can spend more, too.”
Michelle May Buyers Agents principal Michelle May, who also hosts the Buy Your Side podcast, said buyers were focused on space.
“As more and more employers are allowing working from home permanently, it’s become a real fixture for clients to really have that study but also space for kids to do home schooling,” Ms May said, adding NBN access was important.
“Outside space has become more of a focus as well. Depending on the budget it’s either a garden or a functional balcony.”
People are seeking larger properties, with more space both indoors and outdoors. Picture: realestate.com.au/buy
Nearby amenities, such as walkability to green space, were also important given lockdown travel limits, added Ms May, whose agency services Sydney’s inner west and eastern suburbs.
“When you are so limited in where you’re allowed to go, what you have in the immediate surrounding area – whether it’s a playground or a dog park – makes a huge difference.
“Buyers are becoming much more discerning with a focus on what it is that’s outside the property itself as well.”
Ms May said because of the surge in property prices, many homeowners were prepared to look at areas they had never considered before to get the space they wanted.
“With suburb versus space, I think at the moment space is winning because of COVID,” she said.
“And ideally they want three-plus-something – if they’ve got a study nook or maybe an attic they can convert in time, or a studio in the garden.
“You can see that also in the listings and the results of houses versus apartments. The bigger homes that have all those attributes are definitely far more competitive than other properties.”