Sea & Tree change towns continue to grow in popularity

Homes in Australia’s regions have seen a surge in demand in recent years, with many locations experiencing significant growth and increased property values.

Since the pandemic, there has been a noticeable shift with several sea- and tree-change towns joining the $1 million club, according to Domain. That’s after towns like Byron, Kiama, Wingecarribee and Tweed, all in New South Wales, attracted residents leaving the city during the pandemic which, in turn, put upward pressure on prices.

Although their markets have since stabilised, the towns remain popular and price growth has been upheld by the sustained demand compared to five years ago. In some cases, prices have risen between 50 to 85% over the last five years.

This growth in popularity has also meant that more homes in sea- and tree-change towns have made profits on sales. In the June 2024 quarter, CoreLogic’s analysis of profits and losses on sales showed that of the 18,800 resales in these locations, 2.7% made a nominal loss.

This was almost half the number of national loss-making resales and far lower than resource-based regional towns, of which 11.2% made a nominal loss.

So the pandemic-induced shift appears to have solidified in these markets. But what is the reason regional locations are still popular?

Remote and hybrid work

As more individuals and companies embrace flexible work models, there is less need to be physically present in a major city. According to the Australian HR Institute, 97% of businesses in Australia offer some form of flexible working arrangement with 48% requiring employees to be in the office three days a week.

This means people are no longer bound to the city, with the pandemic-inspired living arrangements able to continue.

The growing interest in hybrid work schedules has meant towns that are close enough to the city for a commute a few times a week have become popular.

“With people being able to work hybridly, this makes areas like the Southern Highlands, which are commutable, much more palatable and desirable if you are only having to commute to Sydney a couple of days a week,” said Domain chief of research and economics Dr Nicola Powell.

Affordability concerns

Home values are up in most of the country’s capitals, with an increase of 6.7% in the combined capitals year-on-year in September, according to CoreLogic. This has pushed the median value in the combined capitals to $891,639.

Whereas values in the combined regionals, while increasing an equal amount, have remained more affordable as they began their growth cycle off a much lower base. The median value in September was $640,243.

This offers buyers a lower entry point and a cost-effective alternative to a home in the city.

The combination of lifestyle factors and price is a big driver for the popularity of these regional towns.

Lifestyle appeal

The natural environment of sea- and tree-change towns is a major contributing factor to people making the move. The option of being close to a beach or near the mountains draws buyers and tenants alike.

But, the closer-knit community, good schools and ability to move around easily also add to the lifestyle appeal.

Improving infrastructure

In addition to the lifestyle and affordability factors, improving infrastructure has played a significant role in making sea- and tree-change towns more accessible and desirable.

Many regional locations have experienced upgrades to roads, public transport and communications networks, making it easier to connect with the rest of the country.

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