Unaffordable capital city house prices and a switch to work-from-home policies mean regional hubs are increasingly becoming hotspots for millennial families, and planning authorities need to better prepare for the resulting increase in population, according to the authors of a new moving index.
Newcastle, Wollongong, Lake Macquarie, Queanbeyan, Launceston and Ballarat were all in the top 12 destinations for people making the move, according to the inaugural Regional Movers Index, compiled by the Regional Australia Institute (RAI) in partnership with the Commonwealth Bank.
Migration into Launceston from capitals increased by a huge 88 per cent in the March 2021 quarter.
"What we definitely know has happened through Covid has been an increased prevalence of people moving with their role. That's really opening up the regionalisation of the nation," said RAI CEO Liz Ritchie.
Sydney and Melbourne accounted for 95.9 per cent of the net loss of people from capital cities in the March 2021 quarter.
The number of people moving from capital cities to the regions during the March 2021 quarter increased by 7 per cent compared to the March 2020 quarter and the flow of people from capital cities to the regions accounted for 6.3 per cent of all movers, up 0.7 points on the year prior.
The report uses data from the relocations of bank customers, drawing on a database of around 10 million customers.
Future releases of the index will have a one month reporting gap, an improvement on the quarterly Australian Bureau of Statistics releases and five-year census updates currently relied upon for data on regional migration, according to RAI CEO Liz Ritchie.
"This new index enables the early identification of growth trends and flags emerging hotspots which may need fresh thinking on housing and infrastructure," Ms Ritchie said.
Affordability a major factor, not employment
Ms Ritchie said that the survey highlighted a trend which had been long established - that affordability constraints in Australia's major cities were driving families and younger Australians to look further afield.
"The trend of movement to regions from cities is not a new trend. We have tracked this in our previous reports," she said.
But while previously employment opportunities had been a major factor in when and where people moved to, the change in workplace policies resulting from the COVID-19 pandemic had given more people the freedom to move.
"The research has shown us that one in five city dwellers want to move and the barrier has been employment. As we open [employment] up people are going to make the move. They are voting with their feet," she added.
Currently, the big trend driving people to move to locations like Wollongong, Newcastle or Launceston, particularly for people in the late twenties to late thirties age bracket, was housing affordability.
Property values in regional Australia have experienced double-digit growth over the last 12 months but the continuing disparity with capital city prices meant that many were still looking to move.
"[The decision to move] is driven by larger factors, in comparison to city lifestyle it is much more affordable. It has been and will continue to be. Equally it has those perceived livability and amenity factors," Ms Ritchie said.
The latest research from CoreLogic pegged the median dwelling price in Newcastle and Lake Macquarie at $746,000, the highest on record. The median house value in Sydney currently stands at $1.22 million.
While the influx of people into regional locations would present opportunities for revitalisation, Ms Ritchie also acknowledged that it could present challenges for local infrastructure.
"We need to ensure that that investment is being appropriately allocated and I guess this is what we're hoping to do with the regional index is filling that knowledge gap," she said.
She pointed to an increase in regional housing starts during 2020 as one sign that regional communities were adapting to this increase in population.
As the population in regional communities increased, local planning authorities may also need to consider diversifying their housing stock, Ms Ritchie said.
"Diversity of stock will become a different issue, some communities are there talking about higher density. Not everyone wants to be in a four bedroom house. Regional economies are becoming more sophisticated. It's a very exciting time but it means that knowledge is more important," she said.