An influx of former Sydney residents combined with a lack of housing stock is propelling regional New South Wales property prices to record highs, while pushing locals out of the market.
Figures from CoreLogic reveal property values in rural and regional areas rose by almost 10 per cent last year, which was five times the growth rate in Sydney.
The data also showed 48 per cent of regional NSW reported record median property prices in January.
The figures, which combine the sales of houses and units, saw Burradoo in the Southern Highlands claim the highest median record at $1,725,965.
Eighteen other regional suburbs and towns had record median prices of more than $1 million.
CoreLogic head of research Eliza Owen said the trend was being driven by an exodus from metropolitan areas and fewer regional residents leaving.
“I would expect regional NSW to continue growing in 2021, not only because you’ve got record low mortgage rates but relatively low cases of COVID-19.”
Software engineer John van der Loo is one of those former Sydneysiders who has purchased a property in regional NSW.
He moved his family to Empire Bay on the Central Coast when it became apparent he could work from home permanently.
“We started looking in the middle of the year and there were quite a few properties available, but people are snapping up properties left, right and centre now,” Mr van der Loo said.
Rental squeeze
But Real Estate Institute of NSW chief executive Tim McKibbin said it was not only regions close to Sydney, such as the Southern Highlands, the Illawarra and the Central Coast, that were experiencing growth.
“Places like Albury and Wagga, Dubbo and certainly up on the North Coast — with Coffs Harbour and, in particular, Byron Bay — where median property prices went up 37 per cent in 2020,” he said.
“It floored a lot of people, including me.”
CoreLogic data showed regional rental prices had also risen faster than those in Sydney, surging by 7 per cent.
Mr McKibbin said rentals were also being put under pressure as city dwellers wanted to “test-drive” regional living.
He said the only solution to the squeeze was to increase supply.
“There are people renting a property just to see if they can make their working life work from a regional area.
“Property takes a long time to come to market, so. in the short-term at least, I think the market is going to remain under a lot of pressure.”
Extra pressure in tourist towns
Long-term rentals are proving particularly difficult to come by in regional areas that are also popular with tourists, as many landlords opt for potentially higher returns from holiday-letting.
In Yamba on the North Coast, the local bowling club kitchen was forced to close two days a week during summer because its workers could not afford to live in the town they serviced.
Clay McFarlane is the bowling club’s new chef, and is paying $250 a week to live in a donga with a shared lounge and kitchen area.
“I’m happy to stay here [in the donga] for the moment, but I want to become part of the community and contribute, and it would be nice to have a permanent address.”
Calls for state help
Local Government NSW president Linda Scott said regional councils were reporting increased housing stress among their existing residents.
“Mayors and councillors are concerned at growing numbers of people sleeping rough in regional towns and the need to provide these people with housing,” she said.
Source: ABC News