There has been much commentary about the growth of Australia’s regional centres in response to the COVID crisis. The work-from-home phenomenon was facilitated by shutdowns as people simultaneously reassessed what was important in life. How could we devote more time to family, and less time to worrying about commuting and/or the high cost of inner-city housing?
And so, the great decentralisation of the nation’s big cities got underway. Some even claimed that the shift to the regions would become entrenched. Once everyone discovered the joy of coastal living or a country lifestyle, there would be no turning back. But I have always thought the ‘big shift’ was not sustainable. In January 2021, I wrote a story titled “Why the ‘Sydney exodus’ is a myth” in which I highlighted all the reasons why the exodus from Sydney would never last. This was a reasonably controversial call back then at a time when ABS statistics showed that the Greater Sydney region saw a net loss of 7800 people in the September 2020 quarter, and 6400 in the previous quarter. While those numbers sounded scary, I was quick to point out that losing approximately 28,000 people a year out of a population of 5.3 million, translates into only 0.5 per cent of Greater Sydney residents.
Furthermore, I also argued that there were a raft of reasons why decentralisation would never last once we emerged from business shutdowns and virus lockdowns. Sydney is an entrenched employment and services powerhouse. A global city with incredible attraction. Those that left were sure to be questioning their absence at some stage.
While data watchers will have to wait to later this month for release of the latest quarterly numbers, my on-the-ground experience suggests the great shift back has already begun.
Those people who are on top of these changes are more likely to make the most of future equity gains.
Evidence of the rebound
One of the problems with the decentralisation argument is that it tends to be absolutist. According to some commentators, you can choose to live in the town or in the city, but not both. But that is not how it works in real life.
Many people are adopting a hybrid model so they can both work from home, enjoy their lifestyle and be close to the office when needed – and the evidence is starting to show.
For example, I have noticed – anecdotally at this stage – that the unit sector on the fringes of Sydney’s CBD seems to be making gains. While the statistics are yet to filter through, I suspect we will see more unit sales in the first half of 2022 than we have seen at any other comparable six-month period throughout 2020 or 2021.
What is helping fuel this surge is out-of-town residents seeking bolt-hole accommodation close to the CBD. I believe this is in response to businesses reopening and welcoming back employees – even if it is just a few days a week.
While Zoom meetings may have some practical appeal, personal contact never gets old when there is business to be done.
There is also a push from our state government to see workers return to their offices. The dropping of restrictions is designed to bring people back into town. The CBD is an enormous source of economic strength. Revenue generated by rents, rates, transport infrastructure, entertainment licenses etc. filled the government’s coffers pre-COVID. It’s obvious that those politicians would like to see that income stream ramp up once more.
So how do you profit?
What moves should you make to take advantage of Sydney’s recentralization?
Firstly, don’t hesitate to start your property search. Putting off a purchase may see you competing with even more purchasers as the population rushes back to town.
Next the key is choosing the right kind of asset. Selecting property that has broad buyer appeal should pay handsome dividends in the future. Blue-chip housing in key locations close to the CBD is now best placed for capital growth in my opinion.
Of course, using a buyers’ agent to help you achieve your goals is critical. We have the skills and networks to identify and secure the right property.
So be sure to contact us at Buyers Domain. We can keep you ahead of the wave of returning city dwellers, because being a market leader in times of change will deliver extraordinary results.