The COVID-19 pandemic has seen a change in consumer preferences which could see the outer suburban areas be the big winner this spring selling season, new research has shown.
The Domain Buyer Demand Indicator has revealed both houses and apartments in the outer suburbs of Sydney, Melbourne, Brisbane and were the highest demanded properties for those cities for the month up to 6 September.
The research showed consumers are starting to adapt to the new norm, with working from home making living near the office less crucial in capital regions.
“The current health crisis has changed the way we use our homes, and for some altered our purchasing decisions and property wish lists,” said Domain senior research analyst Dr Nicola Powell.
“While COVID-19 lockdowns sent buyer demand into a state of hiatus, activity from people likely to buy has rebounded in all capital cities apart from Melbourne,” Dr Powell explained.
Not only is buying activity in the CBD changing, so is the rental market, with consumers also looking at regional and outer suburb areas.
According to data released by SQM research, while some capital CBD markets are recording double-digit rental vacancy rates (with Sydney CBD and Melbourne CBD at 12.9 per cent and 10 per cent, respectively), renters hunting in regional areas are facing slim pickings.
This is leading to outer suburbs and regional areas having a spike in growth.
In NSW’s Blue Mountains, a record low of only 0.7 per cent of the area’s rental property market were vacant in August, nosediving from 2 per cent in March, the latest SQM Research data showed.
The Peninsula in Victoria saw a similar situation, with its vacancy rate dropping from 1.3 per cent in March to 0.7 per cent in August – also a record low for the region.
The vacancy rate in Queensland’s Ipswich plummeted from 2.1 per cent in March to 0.9 per cent in August, the lowest it has been in the area since 2005.
Louis Christopher, managing director of SQM Research, said the vacancy figures indicate an ongoing transition to regional areas, thanks to the space and low-density living these areas offer.
“The shift towards regional living continues at pace, largely at the expense of higher inner-city rental vacancy rates. I suspect there will have to be a high point in this move soon,” he said.
“However, I also suspect there will be a degree of permanency with the massive population shift.”