The pandemic years saw a significant movement towards sea and tree changes as people sought refuge in regional areas and embraced a slower-paced lifestyle. However, as the world gradually recovers, we are seeing a resurgence of interest in city living, especially here in NSW.
Post-pandemic urban centres are once again capturing the attention of those who crave the vibrancy, convenience, and connectivity that cities uniquely offer, triggering an urban revival that is poised to have a profound impact on our property markets.
Here, we delve into what is drawing people back to our cities and what it could mean for urban and regional property markets.
The appeal of urban living
Cities have always been hubs of commerce, entertainment, and innovation. Now, as the pandemic subsides and international immigration resumes, people are rediscovering the allure of city living. The bustling streets, diverse dining scenes, cultural events, and countless opportunities for social interactions are not only attracting new residents from overseas, but also starting to draw people back to the cities after the pandemic years saw just over 85,500 people leaving Sydney for regional NSW and interstate locations. 1
Connectivity and convenience
One of the main attractions of city living is the unparalleled connectivity and convenience. Urban dwellers have access to robust public transportation networks, a wide range of amenities within walking distance, and a thriving job market. As workers return to the office, by choice or ultimatum, people are once again prioritising proximity to work, educational institutions, and recreational facilities, causing an uptick in demand for inner-ring properties and areas offering shorter commutes.
Embracing sustainability
It may seem counterintuitive, but the shift back to urban living also aligns with the growing global focus on sustainability and reduced carbon footprints. As people return to cities, population centres become denser, leading to more efficient use of resources and reduced strain on suburban and rural infrastructure. Additionally, the availability of public transport and walkable neighbourhoods in cities encourages greener modes of commuting, contributing to a more sustainable way of life.
Revitalised property markets
After tightening monetary policy throughout 2022 led to a temporary slump in demand with potential buyers erring on the side of caution, we are now seeing an uptick in inquiries and transactions for city properties from both domestic and international buyers. However, with fewer houses for sale, supply remains relatively tight, creating enormous potential for strong sales results.
The data shows that property markets right across Sydney are now seeing a glimmer of revitalisation, with median house values rising by 3.0% since January this year, slightly above-average auction clearance rates and market sentiment on the up. 2
Regional markets resilient but potentially softening
The latest CoreLogic Regional Market Update 3 reveals that while several NSW regional areas continued to show promising growth, recording double-digit annual value in the year to January 2023, there were notable variations in performance across the state, and certain popular lifestyle markets are facing challenges due to softer market conditions and rising interest rates.
Despite these obstacles, the data indicates that regional markets in NSW have demonstrated resilience throughout the RBA’s rate-hiking cycle, with monthly property value changes since May 2022 averaging -0.8% in regional areas compared to -1.1% in the capitals. This trend highlights the stronger price growth that has been observed in regional NSW in recent years.
Summing up
While the pandemic prompted an exodus from cities, the emergence of a post-pandemic reality is ushering in a new era of urban revival. The desire for connection, convenience, and the vibrant cultural fabric that cities offer is enticing people back to the urban core.
As a result, property markets in our cities are poised for growth, with property prices expected to climb as demand rises and supply remains tight. Whether you are interested in buying a house, property investment or selling your home, opportunities abound as our urban property markets sit on the cusp of a resurgence.
1. https://www.abs.gov.au/statistics/people/population/regional-population/2020-21 and https://www.abs.gov.au/statistics/people/population/regional-population/latest-release
2. https://www.corelogic.com.au/news-research/news/2023/corelogic-home-value-index-further-evidence-australias-housing-downturn-is-over
3. https://www.corelogic.com.au/news-research/news/2023/charm-fades-for-australias-high-end-regional-markets
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