The global pandemic has changed the way we work. Remote work for knowledge-based or clerical workers is now the new normal. This trend has birthed the ongoing narrative that regional housing markets may see an increase in demand as proximity to workplaces becomes a less important factor in purchasing homes.
CoreLogic data reports that in the quarter of June 2020, nearby major regional centres saw higher capital growth compared to capital city regions like Sydney, Melbourne and Brisbane.
Could this have been caused by COVID-19?
The higher regional capital growth reported by CoreLogic is a rather short term outcome. It is caused by cyclical patterns and not changes in demographic trends.
There are a lot of factors behind people moving from capital to regional areas. It could be a preference for a more relaxed rural lifestyle, wanting to enjoy lower housing prices or to live in a place with much lower population density. In the wake of a pandemic, moving to a less populated area is indeed desirable. This and the rise of remote work may increase regional migration.
However, we should still keep in mind that businesses are slowly moving back to the office. Moving too far from the CBD may still not be that desirable for the working class.
Whatever the future of the capital and regional housing markets hold, it is sensible for both buyers and the real estate industry to reduce costs and maintain a rainy day fund to be able to weather any unforeseen downturns in the market.
If you are a decision-maker in a real estate agency and you would like to explore how you can reduce your costs through offshoring, give our Head of Growth Michelle Light a call on 0499 094 220.