Invest
Pandemic sees sharp deterioration in regional affordability
COVID-19 lockdowns are leading to consumers wanting to leave the city for freestanding dwellings, which is putting pressure on affordability in regional areas, an economist has revealed.
Pandemic sees sharp deterioration in regional affordability
COVID-19 lockdowns are leading to consumers wanting to leave the city for freestanding dwellings, which is putting pressure on affordability in regional areas, an economist has revealed.
HIA’s Affordability Index showed that regional affordability dropped by 3.7 per cent over the December quarter, due to an increasing number of consumers leaving the city following lockdowns.
HIA’s economist, Angela Lillicrap, said that one of the onsets of falling regional affordability is consumer preferences shifting from cities towards detached housing and more lifestyle regional areas.
“Preliminary migration data shows more Australians left the capital cities in each of the first three quarters of 2020 than at any other time since records began in 2001. This involved an acceleration of retirement plans and fewer people moving to urban centres for work or education,” she said.
As a consequence of this shift in population, house prices in regional areas have outperformed the capital cities over the past year.
“The mismatch between the low supply of homes on the market and strong buyer demand has seen prices increase sharply over recent months. As prices continue to rise, more sellers will put their homes on the market. This will help to keep a lid on the sharp price increases that are occurring,” Ms Lillicrap said.
While regional areas had the sharpest falls in affordability, the strong growth in property values in the city is also instigating a drop in affordability.
“Darwin experienced the sharpest decline in affordability during the quarter, falling from an index reading of 134.6 to 128.0. Despite this decline, Darwin is still considered a very affordable market. Brisbane and Adelaide followed with declines of 3.1 per cent, respectively,” the economist said.
“Sydney continues to be the most unaffordable market with an index reading of 66.4 in the December quarter. Melbourne is also considered an extremely unaffordable market with an index level of 77.5.”
However, she noted that record-low interest rates are offsetting higher property prices.
“Despite the decline, housing is considerably more affordable than the average over the past 20 years,” Ms Lillicrap concluded.
About the author
About the author
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
Real estate investment: Spotting high-growth potentials
Investing in real estate has long been a favoured approach for Australians looking to grow their wealth. Read more
Property
Granny flats become Aussie families' cost-effective solution to soaring living costs
As the cost of living skyrockets, a forward-thinking trend is sweeping across Australia – granny flats are becoming a favoured living arrangement for older Aussies seeking comfort and proximity to ...Read more
Property
Homebuyers grapple with extended savings period amid affordability crisis
Gone are the days when an Australian dream home seemed just within reach. The path to homeownership in Australia has extended by at least two arduous years, as revealed by the latest insights from ...Read more
Property
Hybrid development unlocks new potential for NDIS housing in metro hotspots
In a ground-breaking strategy aimed at addressing the stark imbalance between the location of Specialist Disability Accommodation (SDA) developments and the actual areas of demand, Aligned Disability ...Read more
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
Real estate investment: Spotting high-growth potentials
Investing in real estate has long been a favoured approach for Australians looking to grow their wealth. Read more
Property
Granny flats become Aussie families' cost-effective solution to soaring living costs
As the cost of living skyrockets, a forward-thinking trend is sweeping across Australia – granny flats are becoming a favoured living arrangement for older Aussies seeking comfort and proximity to ...Read more
Property
Homebuyers grapple with extended savings period amid affordability crisis
Gone are the days when an Australian dream home seemed just within reach. The path to homeownership in Australia has extended by at least two arduous years, as revealed by the latest insights from ...Read more
Property
Hybrid development unlocks new potential for NDIS housing in metro hotspots
In a ground-breaking strategy aimed at addressing the stark imbalance between the location of Specialist Disability Accommodation (SDA) developments and the actual areas of demand, Aligned Disability ...Read more
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. Read more