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Moving trends drive up regional property prices

Here's how moving trends are influencing regional property prices, including factors driving city residents to relocate and the impact on local markets in 2024.
By · July 1, 2024
Moving trends drive up regional property prices

As more city folk head to regional Australia, first-home buyers could be getting priced out of the market.

The Commonwealth Bank of Australia (CBA) recently released its Regional Movers Index (RMI) showing city to regional moves hit a 12 month high across Australia in March 2024.

According to the RMI, the number of Aussies moving from the city out to regional areas was up by 24% in the quarter.

While this trend has emerged as a result of more and more Australians seeking affordable housing and a lower cost of living, the soaring demand for regional living is now placing strain on housing supply and property prices in the top regional locations, which could price out first home buyers.

In this article we’ll take a look at current and future projections for property prices in the top regional locations in Australia, and explore what this could mean for those entering the market for the first time.

Buying or renting in Australia’s regional hotspots

Generally speaking, regional markets across Australia are quite small. This means that even a small influx to the population can overwhelm both rentals and properties for sale.

What we’ve seen over the last couple of years, and most recently in the RMI, is that more and more people are ditching the cities for regional hotspots.

The result: less properties available at a much higher price point for both renting and buying.

While established home owners and movers from big cities tend to have a higher level of affordability, this isn’t always the case for first time home buyers.

With housing supply unable to meet demand, national home prices have cycled through 17 consecutive months of growth to hit a fresh peak in May.

The most popular regional spots in Australia include the Sunshine Coast and the Gold Coast both of which are experiencing record highs when it comes to property and rental prices.

Sunshine Coast, QLD

Buying property on the Sunshine Coast

Home prices on the Sunshine Coast have risen close to 70% since March 2020, and the region has emerged as one of the top-performing markets in the country since the pandemic.

The median house price in the area reached $1,042,000 in March 2024 and that figure is expected to continue to climb throughout the rest of the year. This increase represented a quarterly growth rate of 2.7% and annual growth of almost 9%.

While a growing market works in the favour of existing home owners through increased equity and selling potential, it also raises issues of affordability for first-time homebuyers.

Given the stature that the Sunshine Coast now holds as the most popular regional location in Australia, competition for properties is stiff and there are a limited number of entry-level homes available. For those entering the market for the first time, this is less than ideal.

Renting on the Sunshine Coast

The surge in movers to the Sunshine Coast has not only impacted the buyer market, but also those renting in the area.

According to Core Logic Data, in the three months leading to April 2024, the Sunshine Coast recorded a 4.4% increase in rental prices, marking an annual change of 7.1%. This brings the average rental cost to $766 per week.

Even for those who can afford the high prices, vacancy rates are adding an extra hurdle for individuals and families looking to settle in the area.

Typically, a healthy vacancy rate is defined as being around 3% - vacancy rates on the Sunshine Coast are currently sitting at just 0.58%.

Flatmates.com echoes the data stating there are only three rooms available per 123 people looking for one in the popular Sunshine Coast suburb of Caloundra.

Typically, a healthy vacancy rate is defined as being around 3% - vacancy rates on the Sunshine Coast are currently sitting at just 0.58%.

The Gold Coast, QLD

Buying property on the Gold Coast

Median apartment prices on the Gold Coast reached three quarters of a million dollars in the first quarter of 2024. This is up 15% from the previous 12 months and cements the region as one of the most expensive apartment markets in the country (behind only Sydney).

House prices have also soared. The median house price on the Gold Coast is now $1,065,918 up 16% from 12 months prior.

According to Charter Keck Cramer, State of the Market Report, the continued price hikes are linked to challenges in the construction industry, restricting new property development needed to meet the demands of a booming population.

Typically the projects that are getting the green light come with a high luxury price tag, pricing them out of the average first home buyer budget according to Domain.

Rising building and material costs and interest rate hikes had seen some mainstream projects become financially unviable.

Meanwhile, active developments along the waterfront were mainly targeting premium price points and therefore new dwellings at the more affordable end of the scale are limited.

Renting on the Gold Coast

According to Core Logic Data, in the three months leading to April 2024, the Gold Coast - Tweed Heads Region recorded a 2.9% increase in rental prices, marking an annual change of 79%. This brings the average rental cost to $827 per week - hundreds of dollars more per week than the national average.

Median rental costs Australia

March 2024 data from Domain shows the Sunshine Coast and Gold Coast median rental costs are higher than those in Australia’s capital cities.

Property type

Median rental cost

House in Australian capital cities

$630

Unit / apartment in Australian capital cities

$620

House in regional Australia

$540

Unit / Apartment in regional Australia

$460

Source: mozo money-saving app March 2024 data

Will regional property prices drop?

Regional markets across Australia are up more than 50%, while capital city markets have climbed more than 30%.

While top regional locations such as the Sunshine Coast and the Gold Coast once offered a bit of reprieve from extortionate property prices and cost of living pressures, the window to make this a reality is becoming smaller and smaller.

For now, existing homeowners in these areas can revel in their increased equity, while first home buyers are pushed to look even further afield than Queensland’s coastal communities in order to find affordable entry points into the market.

Will regional property prices drop? Or is this trend set to continue throughout 2024 and beyond?

Experts predict it’s highly likely that the Sunshine Coast, Gold Coast and other popular regional housing markets will continue to thrive, and their affordability for first-home buyers will heavily depend on the housing supply.

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