The share of buyers enquiring on residential property interstate has jumped in 2024, with some states attracting more interest than others.
In fact, the overall volume of enquiry coming from property seekers based in a different state to the one they were looking to buy in shows one in five Aussies are enquiring on property listed for sale in another state.
In the 12 months to August 2024, 22% of all enquiries to purchase property on realestate.com.au came from buyers based in a different state to the one they were looking to buy in. In the previous 12 months, interstate buyers accounted for just 17% of enquiries.
The Northern Territory, Tasmania and the ACT are the states with the highest share of enquiry coming from interstate, which means buyers in these states are likely to have the most competition from interstate.
Interstate property seekers enquiring on residential property in the NT account for an 81% share of total enquiries for properties in the NT. The transient nature of the NT population means there is a high proportion of enquiry from those based in another state.
Strong rental yields and affordability also make the NT market attractive to interstate investors. South Australians are leading the charge and account for close to 60% of interstate enquiry for properties in the NT.
The NT is closely followed by Tasmania and the ACT where enquiries made by interstate buyers account for 70% and 69% respectively.
In comparison, just 14% of enquiries to purchase property in New South Wales came from interstate buyers – the lowest share of any state. In Victoria, interstate buyers accounted for 21% of enquiries, the second lowest level behind New South Wales.
As the least affordable state, it is unsurprising NSW is the least popular state in terms of buy enquiries from property seekers based in a different state.
But in the reverse, NSW property seekers make up the largest share of total interstate buy enquiry, with buyers based in NSW holding a 37% share of all interstate enquiry.
This is partly because NSW has the highest population of any state, but this also makes sense in the context of NSW being the most expensive state.
Those interstate property seekers who already own property in New South Wales may have greater purchasing power in the other states. For example, in Sydney, the median price of a home was $1,095,000 in August, and home prices in the city have risen close to 50% in the past five years – an almost $550,000 increase in dollar terms.
Further, the comparative affordability of other states means a buyer based in Sydney who may be unable to afford to buy a home to live in, may instead look to get into the property market by buying an investment property in a more affordable state.
In the 12 months to August 2024, NSW property seekers made up the largest share of interstate buy enquiry in Queensland (56%), WA (49%), SA (38%), and Victoria (38%).
The proportion of enquiry from NSW into both Queensland and WA has jumped significantly in the past year, where the shares were 47% and 32%, respectively, in the 12 months prior.
WA has seen the most significant uplift with a 17-percentage point increase in the share of enquiry coming from NSW. Of all the states, WA has also seen the share of enquiry from other states increase the most in the past year.
This is testament to the strength in conditions in WA’s housing market, which has led the nation over the past year. Home prices in Perth have increased more than 20% in the past 12 months, and in Perth’s North West, values have risen close to 30%. Clearly this surge in values is attracting interest from other states.
Over the past year, investor activity has also increased significantly and nowhere has the return of investors been stronger than in WA, where the number of new loan commitments to investors are up 42% in the 12 months to July 2024 compared to the previous 12 months.
This investor interest is fuelled by the state’s growing population, increasing property values, strong rental demand, low vacancy rates, and the comparative affordability of homes in WA.
Given the large and significantly increased share of enquiry on properties listed for sale in WA from property seekers in NSW, it is clear investors from the east coast have contributed here.
In fact, the overall volume of enquiry coming from NSW into other states shows one in every 4th NSW resident is enquiring on a residential property based in another state. A higher share relative to estimated resident population than in Victoria, Queensland, South Australia, and Western Australia.
However, NSW is behind the ACT, which has the highest volume of enquiry on properties in a different state relative to population, with close to seven in 10 residents enquiring on a residential property based in another state.
The ACT is also the state where home buyers face the most competition from interstate, except for the NT. About 69% of total enquiry on properties for sale in the ACT in the past 12 months came from interstate, with NSW accounting for 80% of that enquiry.
Canberra is home to the Australian government headquarters, renowned universities, and research institutions, offering numerous employment opportunities. Being the political centre of Australia, Canberra has a high rotation of government and military personnel moving in and out, likely a driver of high interstate enquiry both out of and into the state, including those from NSW.
While interstate movers are likely to account for some of the enquiry into other states, interstate investors also play a role.
Low vacancies and strong growth in rents have attracted investors to return to the market.
Just 1.39% of all rental properties were sitting vacant in August, while rents have been increasing at a fast pace for much of the past three years.
What's more, Australia’s current shortage of homes looks set to remain, with building activity remaining challenged, exacerbating a chronic shortage of housing at the same time population growth remains strong.
