Sydney Home Prices Spurring Relocation
Sydney is getting too expensive to reside in, and many are choosing to leave the capital in favor of better home and unit prices. According to the Regional Movers Index, a whopping 80% of Australians who moved from a capital city in the past year are Sydneysiders.
There will always be active internal migration happening all over the country, but Sydney has the biggest chunk of clients leaving due to steep home costs.
Sydney Homes Getting Too Pricey
Capital city properties have appreciated faster than regional areas, and experts note that prices have been rising despite higher mortgage rates simply because there is more demand than supply. While the exorbitant home prices already drive many Aussies away, there is always a robust market in this capital city.
Over the last three months leading to October 2023, Sydney has witnessed a surge in home values, observed in 91.4% of house markets and 87.4% of units. The capital city’s median price for houses is $1,121,196 while units now are at $832,222, quite out of reach for many professionals and families.
Notably, the significant rise in value was registered in these suburbs: Five Dock, Oyster Bay, Penshurst, Concord West, and Concord.
Meanwhile, the fastest rate of price growth was recorded in areas like Ormond, Hampton East, Kingsbury, Northcote, and Thornbury, showing increases ranging from 4.4% to 6.7%.
Eliza Owen, CoreLogic’s Head of Research, attributed Sydney’s rising home prices to increased demand and the supply being unable to keep up. The demand surge has been due to household sizes shrinking since the pandemic and the resurgence of student migrants from overseas.
Renters aren’t faring great, either. Many tenants are forced to move out of Sydney homes as current rates add as much as $700 per week on single detached dwellings. Data on rental rates show that the more cost-effective locations tend to be 20km away from the CBD.
Migration Away from Sydney Towards Regional Areas
Despite the recent trend of property prices staying robust in capital cities compared to regional areas, there has been a noticeable movement of Australians leaving cities for regional locations.
The number one reason? Affordability. It is a significant driver in migration and compels homebuyers to explore alternative regions.
The Regional Australia Institute (RAI) notes there has been a slight increase in capital-to-regional migration levels compared to pre-COVID-19 averages. Constant rate increases plus a surge in job advertisements – 91,400 jobs advertised in regional Australia – meant that individuals could make the practical jump to relocating outside capital cities.
The Snowy Valleys Local Government Area (LGA) in southern NSW enjoyed a 200% net migration boost. But the most favoured destination for internal migration remains Queensland’s Gold Coast, which attracted 16.7% of total migration from 2022-2023.
Economists note that Sydney will cater to a group of home buyers who are less interest-rate sensitive, clients who can access the bank of mum and dad, and those who have built up considerable savings and don’t want to miss out on a property.
Otherwise, the price cap for buyers who are basing home prices on national median averages would still be priced out of the most coveted Sydney suburbs.
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