Is the COVID crisis driving a tree change?

One of the things that interests me about real estate reporting is the way that some media report on Australia’s “property market”.

The truth is, there is no single property market in Australia – instead, there are hundreds (perhaps even thousands) of smaller property markets across the country, each operating with their own unique drivers of growth and supply and demand dynamics.

This is what makes the field of property research so interesting, as we can see trends emerge that, as investors, can add a lot of value to our due diligence process.

For instance, the latest Domain research has revealed insights into property search trends, revealing that more Victorians now looking to regional areas of the state like Hume and Bendigo, to find their homes.

This is perhaps not too surprising considering we are now six months into the COVID-19 pandemic, which has dramatically changed the way we live, work and play.

Domain economist Dr Nicola Powell says the pandemic has “placed our homes under extreme scrutiny”, with many property buyers adapting their wish-lists and paying closer attention to aspects that perhaps weren’t as important to them in the past.

It might be the fact that the home has no dedicated work space, for instance – or that it lacks of separation from the rest of the family, or limited outdoor space.

“For some buyers, [the pandemic] has forced a declutter of every inch of our home, but for others, particularly in Victoria, it has sparked an interesting trend.

The COVID-19 crisis has clarified where we want to live, particularly as the prospect of working from home becomes the new norm for desk-based workers.

This is further heightened as we consider how we will live through the next inter-pandemic phase,” Powell says.

“Lockdown has unleashed a plethora of reactions, from hopeful bargain hunters dreaming the property market would undergo a catastrophic correction to off-grid remote living, or a reaction somewhere in between, such as a move to a regional area.”

When we look to the data, its interesting to note some of the key insights, which reveal that regional Victoria has indeed experienced a revival in interest in the months leading up to July – so high, in fact, that it has seen the highest level of interest in at least four years.

This growing interest in regional property searches from prospective home-hunters jumped amid the first lockdown and have remained elevated since, with total activity up 43.9 per cent on last year.

“Interest in real estate has soared since the onset of COVID-19-related social distancing rules, the economic shutdown and the stricter stage four lockdown.

While Greater Melbourne has the largest volume of views per listing, the biggest change has been recorded in regional Victoria,” Powell confirms.

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“The demand for a regional lifestyle has clearly been reignited and while the rapid acceleration of views per listing was initially supported by fewer newly listed homes for sale during periods of lockdown, interest has remained elevated as social distancing rules eased and more homes were listed for sale.

It is likely stage four restrictions will affect the number of searches over August, as interest remains heightened at a time fewer homes are listed for sale.”

The regions seeing the biggest jump in property listing viewings were Hume, Bendigo, Shepparton and Victoria’s regional north west.

Across Greater Melbourne, Domain’s research shows that views per listing remain 1.7 per cent higher than the same period last year, although the total number of views on Melbourne property over May, June and July are almost as high as the October 2017 peak, and remain the highest in at least four years.

Is all of this to suggest that we might be about to experience a massive exodus of Melburnites seeking a tree change and a quieter life in regional areas – one that includes more open space, less commutes and a more affordable cost of living?

Whilst I think it’s too early to call an official “mass tree change movement” just yet, I do believe the pandemic may prompt some sectors of the community to truly consider their wants and desires when it comes to their ultimate lifestyle.

This could see a temporary bump in interest in regional Australian homes.

How long this lasts remains to be seen, however for investors seeking to invest in properties that remain in demand with buyers and renters for the long-term, keeping abreast of the latest research is always going to be beneficial.

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on

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