The coronavirus has forced changes in social behavior affecting property markets differently as VESPA buyers (Virus Escapees Seeking Provincial Australia) grow in number and target regional areas such as Newcastle and the Hunter.
In each state, inner-city property markets are still showing relatively weak performance. This is because inner cities have historically seen greater housing demand from renters, particularly those from overseas, or working in industries that have been acutely affected by the pandemic. However, it is noteworthy that regional Australia such has previously outperformed capital city markets based on cyclical patterns. Capital city markets generally have higher volatility, meaning returns are higher during upswings, and declines are deeper during downswings.
In our business we are experiencing strong sales and extremely low rental vacancies, with most properties being leased very quickly with little or no vacancy periods. This is attracting property investors into the local market, combined with an influx of first home buyers and owner occupiers moving to the market. from outside the region. Hence the local property market is very strong across all price ranges.
Source: Corelogic, Bernard Salt- The Demographics Group, Regional Australia Institute and RBA.