ABS reports a record number of people are leaving Australia's capital cities

Demand for regional housing has increased since the pandemic struck. Photo: Sylvia Liber
Demand for regional housing has increased since the pandemic struck. Photo: Sylvia Liber

Australia's capital cities recorded their largest net loss of people on record in the March quarter according to the Australian Bureau of Statistics, with many relocating to other areas within the same state.

Capital cities had a net loss of 11,800 people from internal migration in the March 2021 quarter, surpassing the previous record of 11,200 posted in September 2020, according to the latest ABS data release.

Net loss is the term used to describe the scenario in which more people leave a city than arrive during a set period.

Brisbane gained the most people through net internal migration, up 3,300, while Melbourne lost the most (8,300) followed by Sydney (8,200).

The figures indicate that a number of city dwellers have been moving to different locations within the same state during the COVID-19 pandemic, a trend widely reported by regional real estate agents and population experts since the onset of the pandemic.

All up there were 66,300 departures, up from 66,000 the previous quarter, to non-capital city areas in the March quarter.

Sydney recorded a net loss of 5100 people to the rest of NSW, a slight decrease on the previous quarter.

Melbourne recorded a loss of 4800 people to the rest of Victoria, up from the 4200 in the previous quarter.

The figures show that those in the 45-64 age bracket made up the largest net loss for both cities.

But Tom Wilson, principal research fellow at the University of Melbourne's School of Population and Global Health cautioned against reading too much into the latest release, explaining that the data from the ABS did not give an insight into where in NSW or Victoria these people were going.

"It's interesting data that the ABS released yesterday but it is quite broad in scope it deals with interstate migration and migration between states. We don't know who is moving and we don't know why they're moving," he said.

Mr Wilson also stated that it was important to consider the departures in the context of the halt to overseas migration, which had dramatically reduced the number of people moving to Australia's cities, and the potential for those living in the regions to have postponed moves to relocate to the city.

The 2021 Census, due to be conducted August 10, would shed more light on the precise patterns of regional migration, though results wouldn't be available until 2022.

Mr Wilson said that the Melbourne lockdown in 2020 had likely accounted for a portion of the exodus from that city, but that it was difficult to predict whether the same trend would result from Sydney's current lockdown.

More people planning to move

The data release coincides with a number of other metrics and reports that indicate an increasing appetite for city dwellers to make the move to the regions.

A new index from the Regional Australia Institute, mapping regional moves based on change of address details for Commonwealth Bank customers, found that 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.

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It also found that 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, with the Gold Coast, Geelong, Newcastle and Wollongong among the locations seeing the biggest boost to population.

Meanwhile, a survey of 5000 people conducted by Real Insurance, released in May, reported that 43.8 per cent of respondents had already moved to a regional area in the past two years or would consider doing so in the next two years.

Demand outstripping supply

Property prices in regional areas have also been rising since the beginning of the pandemic, with CoreLogic reporting that the combined regional markets recorded price growth of 19.6 per cent in the year ending July 2021, compared to 15.1 per cent for the combined capitals.

Real Estate Institute of NSW CEO Tim McKibbin said that latest ABS figures weren't a surprise.

"I don't think its any secret anymore that people are flooding out into the regional areas and I should imagine with the current lockdown we are going to see the second wave of Sydneysiders and probably people in Wollongong and Newcastle looking to move out to the regional areas," he said.

The work-from-home trend had seen many Sydneysiders buy property in the regions, resulting in increased demand for stock.

"A lot of people had decided that they don't want to give up there home in the city so they've kept that and bought another property in a regional area prior to the pandemic now have two properties," he said.

This, combined with the number of Australian expats returning home and taking up residence in their investment properties, had flow on effects for the rental market, with the REINSW recording record-low regional vacancy rates.

"I was talking to an agent from a regional area today and he said he had 45 applicants for a rental property and said that as soon as they get a rental property they're able to lease them. It is really tough out there," he said.

Real Estate Institute of Victoria president Leah Calnan said that many of her regional members had been reporting an increase in demand for regional properties since the pandemic began.

"With each lockdown it appears to reengage the activity across regional Victoria," she said.

"There's been the higher transaction levels," she said.

"The growth [in prices] was certainly greater than metro Melbourne and it is certainly trending that we'll see that in the next two quarters," she added.

The result of this boost in demand would continue to lead to higher prices but also put strain on local infrastructure, she said.

"We're already seeing the increase in prices but ultimately its just going to put additional pressure on the existing infrastructure in towns, the facilities that locals are accustomed to using now. There will be delays as people go in to see the dentist, to see the doctor, for example."

Local authorities would need to act quickly to avoid placing additional strain on regional communities.

"I think councils municipalities really need to look at the overall planning of their towns moving forward - they need to remove the red tape and fast track land release sand that will slightly remove the pressure," she said.

As international borders opened the trend away from Melbourne toward regional Victoria would likely slow down, Ms Calnan said, though it was unclear to what extent.

"I would anticipate that it would slow down, but there is still the question of when the borders open and we start to see immigration flowing through - where are those new arrivals going to look for housing? Because affordability going to play a part there."

Those looking for in-depth answers to how the pandemic had reshaped Australia's population should make sure they participate in the 2021 census, Mr Wilson said.

"It does emphasise how important it is to get a really good census count," he said.

This story People are leaving capital cities at record rates, but where are they going? first appeared on Newcastle Herald.