A surge in demand for properties located in coastal and hinterland ‘lifestyle’ regions and towns. While a great deal has been written about the resurgence in the so called ‘sea change’ phenomenon, many of the prime hinterland regions within close proximity to Australia’s capital cities have also benefitted from a renewed ‘tree change’.
CoreLogic head of research, Tim Lawless delivers his analysis on the trend around tree change activity in Australia, with some interesting results.
He found that although the pace of capital gains is generally easing, a variety of factors have contributed to renewed demand for properties outside the cities.
A large part of it must be attributable to the ‘wealth effect', where home owners (particularly those in Sydney and Melbourne) have seen a substantial wealth boost via their property holdings.
Couple this with a large cohort of baby boomers seeking out holiday homes or relocation options as they shift into retirement age, and the demand picture becomes more pronounced.
Perhaps another element is the growing acceptance and popularity of ‘telecommuting’ thanks to faster internet speeds, wider employer acceptance of working from home and broader availability of technologies such as VPN, which provides a secure virtual office environment for staff working remotely.
A final piece of the puzzle comes back to housing prices and affordability. It’s often the case that hinterland properties will provide a lower entry point to the market relative to their coastal or big city counterparts, especially when you take into consideration that typical block sizes are much larger.
Looking across some of the most popular hinterland regions adjacent to the capital cities shows a broad range of values and historic growth conditions.
Across the selected regions, the hinterland areas of the NSW Southern Highlands and the Macedon Ranges in Victoria show the most significant value premium. The median dwelling value across the Southern Highlands of NSW is just over $735,000, while the Macedon Ranges have a typical dwelling value of roughly $700,000 – not cheap, but both regions show a lower median dwelling value relative to their respective capital cities.
At the other end of the spectrum is Tasmania’s Central Highlands, where the typical house is worth just over $200,000.
The regions to see the strongest growth over the past five years are generally very different to the best performers over the past twelve months. The hinterland areas peripheral to Sydney have dominated the capital gain stakes over the past five years, however growth in those areas has slowed substantially over the past twelve months.
The past twelve months has seen the Gold Coast hinterland record the fastest rate of capital gain, with dwelling values up 8.1%, followed by Vic’s Macedon Ranges where growth seems to have rippled away from the previously more popular Yarra Ranges.