Thousands are fleeing Australia's capital cities – an exodus that’s being reflected in house prices
A record number of Australians are fleeing capital cities to escape COVID-19-related lockdowns, according to new data from the Australian Bureau of Statistics.
During the first three months of the year, 28,439 Sydneysiders abandoned the city and 28,540 people moved out of Melbourne, according to ABS data. Across all capital cities, 66,254 residents moved away.
Even accounting for new arrivals, the population in Australia’s capital cities fell by a record 11,845 in the March quarter, according to The Daily Mail.
Melbourne had the largest exodus, losing 8,273 people on a net basis after enduring a 112-day lockdown last year. In Sydney, 8,169 more people moved out than moved in, The Daily Mail reported. Brisbane bucked the trend, with a net gain of 3,274.
The urban exodus continues to be reflected in house prices. While Sydney’s median house price hit a record high of $1.258 million in June, regional areas along the east coast posted even faster price growth, according to data from CoreLogic. While Sydney’s new median price represented a 2.1% monthly increase, the NSW Mid-North Coast posted a monthly price hike of 3%.
In the past year, Sydney property prices have risen 18.2%, while regional NSW posted a 22.9% increase, with coastal areas especially popular, The Daily Mail reported. Regional Queensland reported a 19% increase, and regional Tasmania posted a 22.6% spike.
Nationally, house prices showed an 18.4% annual increase – the fastest in 17 years.
However, there are signs that the housing boom is cooling, with the value of new home loans falling 1.6% in June.
Steve Mickenbecker, Canstar group executive of financial services, said the continued lockdowns were starting to put pressure on the market.
“For the first time in eight months, new housing lending has retreated in June, coinciding with the start of Sydney’s recent COVID-19 outbreak,” he told The Daily Mail. “With the lockdown extending, you would have to expect a softer July coming next, as already foreshadowed by lower auction prices.”
CommSec senior economist Ryan Felsman told the paper that lockdowns in Sydney and Melbourne were likely to stifle demand for the rest of the year.
“Prolonged lockdowns in Sydney and Melbourne and virus flare-ups elsewhere are likely to slow the rapid pace of home price growth in the second half of 2021,” he said.