Australia's regional areas are in high demand as city dwellers leave metro areas and regional residents stay where they are.
During the pandemic, Australia’s regional areas experienced a resurgence as city dwellers sought to escape from lockdowns, looking for larger properties with more outdoor space.
Post-pandemic, there was a brief increase in the number of people moving back to the cities. However, this trend has recently declined, with many opting to remain in regional areas.
Research from the Regional Australia Institute, using customer data from NAB, shows that the number of city dwellers relocating to regional areas is nearly 20% higher than the pre-pandemic average, and 1.8% higher than during the peak of the lockdowns.
Additionally, residents already living in regional areas are largely content, with fewer people moving from one regional area to another.
One of the main factors driving city dwellers to the regions is the high property prices in metropolitan areas, coupled with ongoing cost-of-living pressures.
Potential buyers are finding it increasingly challenging to afford reasonably-sized properties in the cities, with many first-home buyers settling for one-bedroom apartments to enter the property market.
However, with hybrid work arrangements, many employees only need to be in the office a few days a week, making it feasible to live further from their place of work.
Regions such as Geelong (VIC) and the Gold Coast (QLD), just a short distance from Melbourne and Brisbane, are seeing high property demand.
The largest outflows of city dwellers to regional areas are from Sydney (57%) and Melbourne (38%), with most settling in regional NSW and VIC.
Interestingly, 24% moved to regional Queensland even though only 1% left Brisbane. This indicates that most movers to regional Queensland come from other states.
Similarly, in WA, 6% moved from the cities to regional WA, whereas Perth saw a net inflow of 3% from other cities, suggesting more interstate movers are heading to regional WA.
The top regional destinations for capital city dwellers are all areas close to beaches or lakes, with the Sunshine Coast being the most popular.
Geelong in regional VIC and the Gold Coast in QLD were the second and third most popular destinations.
Moorabool in VIC, neighbouring Greater Geelong LGA, came in fourth, followed by Lake Macquarie, just outside Newcastle in NSW, at fifth.
While property seekers are drawn to regional areas due to greater affordability, increasing demand is driving up prices in these regions.
In November, the median weekly rent in regional Australia was $550, compared to $640 in the combined capital cities.
Since the start of the pandemic, regional rents have increased by 49%, compared to 45% in capital cities.
The higher growth in regional areas has continued recently, with a 10% increase in the past year, compared to 7% in the capitals.
The same trend is seen in sale prices, with the median sale price in regional areas increasing by 55% since the start of the pandemic, compared to 35% growth in the capital cities.
The median sale price for regional Australia in November was $650,000, which was $200,000 less than the median price in the capital cities at $850,000, indicating that properties remain more affordable in regional areas despite higher growth rates.
Regional Australia offers larger properties at more affordable prices, allowing first-home buyers the chance to own a house for a similar price to a one-bedroom apartment in major cities.
Regional living also provides a more relaxed lifestyle, with ample nature and the opportunity to live near water without paying high prices found in Sydney's eastern suburbs or Melbourne's inner south.
Additionally, with many workers having the option to work from home, more homeowners and renters can enjoy country life without having to commute to the city as often.
But it remains to be seen whether the increasing popularity of the regional areas will keep pushing up prices and reduce available stock to buy and rent.
