House prices rocket in Australia's top regional growth areas

Home values in Australia's most in-demand country towns are surging strongly as the COVID-led exodus from capital cities continues, with the nation’s top five growth areas for regional migration located within a three-hour drive of Melbourne. 

New research from the Commonwealth Bank showed Melbourne’s numerous and lengthy lockdowns drove a mass exodus to nearby country towns in 2020-21, with five local government areas within a three-hour drive recording at least a 47 per cent lift in regional migration.

Leading the nation with a 68 per cent rise in regional migration was the Shire of Moorabool in western Victoria, with its main centres Bacchus Marsh and Ballan not only recording strong population growth, but also big gains in house prices.

CoreLogic data showed median house prices rose by 17.6 per cent in the 12 months to the end of August in Bacchus Marsh, which is located around 45 kilometres from the Melbourne CBD.

Ballan house values accelerated even faster over the year to August 31, recording 40 per cent growth in the median house price.

The Shire of Mansfield, located around 2 hours drive north of Melbourne in Victoria’s High Country, recorded a 62 per cent lift in regional migration in 2020-21.

Home values rose accordingly in Mansfield, with CoreLogic data showing the median house price rose by 34 per cent in the 12 months to the end of August, while the median unit price increased by 40.4 per cent.

Regional migration surged by 52 per cent in the Shire of Carangamite, located in the South West region of Victoria. 

Houses in Carangamite’s biggest centre, Camperdown, rose in value by 28 per cent in the 12 months to the end of August, while unit values recorded 40 per cent growth over the same period.

Other local government areas within three hours of Melbourne that recorded strong annual growth in migration included the Murray River Council area in NSW at 48 per cent, and Victoria’s Alpine Shire, at 47 per cent.

Murray River's biggest town, Moama, recorded a 31 per cent lift in its median house price, while in the town of Bright in the Alpine Shire, median house prices gained 33 per cent over the 12 months to August.

The CommBank research also showed the largest numbers of capital city residents that moved chose high-population coastal areas, with 11 per cent of all previous city-dwellers heading to the Gold Coast.

The next most popular destinations were the Sunshine Coast, Greater Geelong, Wollongong and Newcastle.

CommBank said the pandemic-led acceleration of city resident migration was especially pronounced in Geelong, where a tight rental market has resulted in a local building boom.

More than 4,600 new homes were approved to be built in 2020-21 in Geelong, a 48 per cent increase on the previous years.

CommBank executive general manager for regional and agribusiness banking, Grant Cairns, said big uplifts in house prices in capital cities and new flexible work options had made a lifestyle shift a realistic option for many movers.

“The experience of lockdowns is front of mind for Victorians, so the desire to seek a tree change is rapidly growing,” Mr Cairns said.

“It is positive to see the development of infrastructure - particularly in regional areas - is growing to meet the increased demand.”

Regional Australia Institute chief economist Kim Houghton said the research would enable local leaders and business owners to prepare for further population growth.

“We can also see that the number of regional residents choosing to stay put has increased, which is likely to be contributing to the housing squeeze in some areas,” Dr Haughton said.

Across the country, Perth was the only capital city to record more people moving into the city than leaving, while Sydney claimed the biggest share of net capital city outflows at 49 per cent.

Melbourne’s net capital city outflows rose to 47 per cent, up from 39 per cent a year earlier, while regional Queensland’s share of net migrants from capital cities grew to 28 per cent.