SINCE 1997

First-home buyers on the move across state borders

First-home buyers are increasingly looking beyond their own backyard for their first property, and the state with the itchiest feet may come as a surprise.

Border between Queensland and New South Wales
Rising property prices in Sydney have helped fuel population increases in other states.

Much has been made of the exodus north of Melbourne and Sydney residents but among first-home buyers at least, South Australians are the most likely to be looking interstate for their property purchase.

Recently released data shows the loss of resident population in New South Wales and Victoria in the final quarter of 2021 resulted in a growth of population in all other states and territories, except for the Northern Territory.

Most notable, more than 50,000 new residents moved to Queensland in 2021.

The housing affordability crisis has pushed a number of first home buyers to consider a move interstate, according to new research by comparison site Finder.

According to the First Home Buyer Report 2022, which surveyed 1,001 first home buyers in Australia, 1 in 8 first-home buyers (13 per cent) are searching for their home interstate as well as, or in place of, their own state.

In addition, the report found that 25 per cent of first-home buyers are searching for a property in a different region within their own state.

Percentage Of First Home Buyers Searching Outside Their Home State

Percentage Of First Home Buyers Searching In A Differnt Region Of Their State

Overseas offset

Housing Industry Association Chief Executive Tim Reardon said a slow return of overseas migration was easing the adverse impact of a loss of workers from Australia’s two largest states.

“In 2021, more than 54,700 residents left NSW and Victoria as the COVID exodus to the regions continued.

“In the final quarter of 2021, however, the number of overseas arrivals more than offset this loss of interstate migration.

“This remarkable ongoing shift in the location of the resident population has been a significant driver of the acute shortage of rental accommodation in Australia.

“With the return of overseas migration, Australia’s annual population growth has started to recover from the COVID shock with the resident population increasing by 0.50 per cent in 2021, compared to an average growth in the decade prior to COVID of 1.54 per cent.

“A stable and reliable migration pathway for skilled workers is central to a strong, and growing, national economy.

Richard Whitten, home loans expert at Finder, said rising property prices had made home ownership increasingly difficult. 

“This is particularly the case in larger capital cities where demand is so high.

“Buyers who are open to relocating can benefit from lower prices in regional areas or smaller cities.

I moved from Sydney to Melbourne, partly because of property prices and am aware that when you re-examine your property budget in a different market you suddenly have a lot more options.

“If you do choose to move interstate, just be aware that things like stamp duty and first-home buyer concessions vary by state.”

Across the eight capital cities, houses have risen by an average of 19 per cent over the past year, and units by 12 per cent, although units have made gains against houses recently.

The demand for high quality lifestyle property from cashed up downsizers will shape the market in the next decade.

- Steve Douglas, Smats Group Executive Chairman 

Over the three months to March, housing values across the combined rest-of-state regions increased by 5.1 per cent – more than three times the speed of housing values across the combined capital cities (1.5 per cent).

In the 12 months to June 2021, the combined capital cities population declined for the first time on record, falling by 0.1 per cent. Melbourne had the largest net loss of 61,000 people.

At the same time regional areas had a net gain of 49,000 people.

“This regional price growth reflects heightened demand through 2020-21 as many city-dwellers took on sea and tree changes.

“We’ll likely soon see a market correction as increased movement from overseas further boosts demand in the cities,” Mr Whitten said. 

South Australians (17 per cent) are the most likely to be searching interstate, followed by those from New South Wales (14 per cent). In comparison, just 6 per cent of Western Australians are looking beyond their state’s borders.

When it comes to searching in a different region of the same state, Queenslanders and Victorians (each 26 per cent) are the most likely to do so, while Western Australians are again most likely to stay put (20 per cent).

SMATS Group Executive Chairman Steve Douglas said he expected inward migration to Australia to be a significant factor in moderating any predicted real estate price falls.

“The market is driven by owner occupation, who account for around 65 per cent of the market, not investors, and we're still yet to see the return impact of migration, which I expect to take effect over the next six to 18 months.

Mr Douglas added that another form of population movement was underway.

A serious amount of downsizer activity will occur in Australia over the next 10 years due to ageing population, lifestyle changes and the subsequent wealth release from long-held premium property.

The demand for high quality lifestyle property from cashed up downsizers will shape the market in the next decade.

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