Episode Transcript
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Speaker 1 (00:01):
Hi art Esside. Hi, I'm Jackie Loomb with iHeart Essay.
This week we're looking into regional South Australia's housing market
and what an influx of new residents is doing to
home prices, but also communities that are beginning to burst
the seams. The twenty twenty four Regional Movers Index highlighted
a few areas of particular interest across our state and
(00:22):
which local government areas are attracting the largest number of
internal movers, meaning those that go from region to region
and the numbers who relocate from cities. Last year saw
a massive spike in internal movement to the Barossa and
Victor Harbor, while murray Bridge saw a huge number of
city slickers moving further out and the York Peninsula has
been identified as one of the fastest growing LGAs. Our
(00:44):
reporter in Port Lincoln Brook, Seychell, spoke to the research
director at Cotality formerly core Logic, Tim Lawless. She asked
him what's driving the shift from Adelaide to regional essay
and whether it's changing the demographic of smaller communities.
Speaker 2 (00:58):
Well, there's definitely a few is happening here and it's
not something that's unique to South Australia. By the way,
we're seeing this around most areas of the country where
well through the pandemic, for starters, a lot more people
were moving to regional parts of the country and there
are a lot fewer people leaving regional parts of the
country to move to the capitals. That trend has abated
a little bit, but it's still much higher than what
(01:21):
it was pre pandemic, and I think part of this
trend is influenced by things like housing affordability, particularly in
the market like Adelaide, where even though housing prices just
on a medium value are still lower than say Sydney
and Brisbane, when you adjust for local incomes, Adelaide has
become one of the most unaffordable housing markets around the
(01:41):
country after Sydney. So it's reasonable to expect that people
are looking for more affordable housing options, which absolutely the
regional parts of the state do offer up. But there's
also other things, like you know, since the onset of
the pandemic, there has been some acceptance of remote working conditions,
So those areas that are in the sweet spot of
having I guess a livability dividend and they're also commutable
(02:05):
back to major working nodes, they become quite a bit
more popular as well, and you certainly see that in
price growth across a lot of parts of regional South Australia.
In fact, broadly, when you look at regional South Australian
housing trends, we've seen housing dollies rise about thirteen percent
over the past twelve months. Adelaide's up nine point eight percent,
and we've been seeing this trend of our performance across
(02:28):
the regional markets for some time now.
Speaker 3 (02:29):
Alrighty, so the regions are the place to be it sounds.
Speaker 2 (02:32):
Like, well, yeah, absolutely, it's they are becoming more popular
and there's a huge range of variability when you look
across regional South Australia. You know, the most expensive markets
tend to be around sort of Kangaroo Island, Fleurio, the
Limestone Coast, Barossa. Those sort of markets, as you can imagine,
tend to have quite a premium associated with them in
(02:52):
terms of their the typical housing prices. But we're also
seeing markets that are a bit more far flun you know,
look at their Peninsula is example, or the Mid North
where we are seeing very strong rates of growth. In fact,
the last twelve months, the Mid north of Regional South
Australia seeing values rise by that eighteen percent. Across the
(03:13):
peninsula we've seen about a fourteen percent growth rate, so
we're definitely seeing values rising in line with this strong demand.
Speaker 3 (03:21):
What's the wider impact on the regions with this steady
inflow of new residents.
Speaker 2 (03:26):
Well, there's definitely pros and cons with strong population growth.
The positive side, it tends to be economically stimulatory, tends
to drive value growth for homeowners. Arguably that can be
a downside if you don't yet own a home, because
affordability becomes more challenging. But the downside tends to come
with when you have strong rates of population growth but
(03:48):
you don't have an equivalent level of say infrastructure investment
or widening the roads, more schools, more healthcare, that type
of thing. The thorial challenge with the rapid population growth,
and it's probably fair to say that there are some
growing pains across parts of Regional South Australia as we
see the rate of population growth pickup and infrastructure tends
(04:11):
to take longer time to deliver.
Speaker 3 (04:12):
Are these areas equipped to handle the growth, especially when
it comes to things like schools and transport, Well, that's probably.
Speaker 2 (04:20):
Some of the growing pains that we're seeing now, and
there probably are some examples where we haven't seen the
level of essential services keep pace with population growth. There's
probably other examples where the regional markets are established, where
there is an established community and healthcare and schools already exist,
but whether or not they're capacity or getting closed to
(04:43):
capacity is probably another question. So if we do see
this rate of population growth continuing, then you'd have to
argue that unless we start to see a significant pick
up an infrastructure spending and delivery, which definitely takes some time,
then you probably see some worsening of the growing pain.
Speaker 3 (05:00):
There's been concerns raised around GP shortages and limited healthcare
access in growing regional areas. Is this likely to affect
the appeal of moving away from the city on a
long term basis.
Speaker 2 (05:13):
Absolutely, And you'll find that if areas don't keep up
with essential services and infrastructure, then logically people stop coming,
or people find that it's maybe that Sea Change or
Tree Chaine, a regional move that they've embarked on doesn't
suit them, and they move back to an area that's
(05:33):
better serviced.
Speaker 1 (05:34):
We'll have more after the break welcome Back. Today, we're
looking into the region's continuing popularity with residents shifting or
at least staying in a post COVID world. We just
heard from the research director at Totality or formerly core Logic,
(05:55):
Tim Lawless, about what's driving the move and whether our
towns are keeping up up. According to prop Track, home
prices in regional essay lifted nearly half a percent in April,
with annual growth now eleven point six percent higher on
the same time last year. I spoke with senior economists
at prop Track Eleanor Cray about what our house prices
are looking like at the moment.
Speaker 4 (06:16):
Looking at regional South Australia the Southeast region, we've seen
that medium values are currently sitting a little over five
hundred thousand dollars, so at five hundred and thirty three
thousand dollars they've increased just a little under eleven percent
over the past year. And again then looking at the
Outback region which includes the Spencer Golf and Air Peninsula,
(06:40):
home prices have increased a little over eight percent over
the past year and the medium value of homes is
sitting at three hundred and twenty five thousand dollars.
Speaker 1 (06:50):
So with people coming into the regions and all of that.
Is that what you guys are putting this down to
with the prices increasing or is it due to other factors?
Of course obviously lost of living and everything is just
getting more expensive. But what do you put this increase
down to.
Speaker 4 (07:05):
So we've seen probably a combination of factors that have
fueled pretty strong home price growth in both Regional South
Australia and of course Adelaide in recent years. So we
know that. I guess the South Australian property market overall
has been one of the strongest performing markets in the
country for quite some time. So Adelaide has firmly cemented
(07:29):
its place as one of the strongest capital city markets
in the country over the past couple of years, and
Regional South Australia is in the same bucket here. So
I think we've got this combination of relative affordability, although
that affordability advantage has been significantly eroded in Adelaide. When
it comes to Regional South Australia, the Southeast Region which
(07:51):
includes regions like the Murray Lands, the Riverland and then
the Outback region, the medium value of homes is still
a lot lower than elsewhere in the country, that relative
affordability advantage is still in play. We've also seen that
supply conditions with respect to stocklifted for sale have been
pretty tight, and of course population growth has also played
(08:11):
a role. So these fundamentals are really fueling demand across
regional South Australia where we know that lifestyle appeal and
really value for money have continued to attract buyers, particularly
in the way of increased workplace flexibility.
Speaker 1 (08:27):
Yeah, definitely. So yeah, with people being able to work
from home now though that is you know, slowly going
back to the office lifestyle. In the COVID era, lots
of people were looking to move out to the regional
areas because then you could have a bit more of
a view when you're sitting at home in your office
or whatnot. So that's still happening.
Speaker 4 (08:46):
So we're seen that, I guess those trends that we
saw during COVID where we really saw I guess a
regional boom or a real increase in demand for regional
living have returned back to more bridge levels. But certainly
we're seeing that demand for property in regional South Australia
(09:06):
remains pretty buoyant. With that lifestyle appeal remaining in play,
and of course the relative value that property in regional
South Australia continues to provide. Although interest rates have begun
to move lower, they did increase significantly in twenty twenty
two and remain at higher levels throughout twenty twenty three.
(09:26):
In twenty twenty four, and that increase in interest rates
and reduction in borrowing capacities saw many buyers really pushed
down the value chain and looking for more affordable properties
in more affordable regions.
Speaker 1 (09:40):
Yeah, and that even spread into rentals, I suppose as well.
Speaker 4 (09:43):
So we've seen that rental markets have been incredibly challenging
over the past few years. Rental affordability has deteriorated significantly
and rents have risen at a very fast pace. Although
we are seeing that conditions are easy slightly at the
moment and the pace of rental price group is flowing,
(10:06):
rants have still increased significantly in recent years.
Speaker 1 (10:09):
Our reporter in murray Bridge, Chris Gascoon, got the picture
from a real estate point of view. He had a
chat with Mark Ford, the sales director at Harris Real
Estate South Coast. Mister Ford says demand down South in
the last five years has gone above and beyond what
they would have anticipated, and the demographic has definitely shifted.
Speaker 5 (10:28):
The biggest thing since COVID is that the demand for
the South Coast has grown exponentially. I think most people
from the state from Adelaide people downsighting, but they've seen
the beauty of the region, the fact that it's got
such close proximity to a capital city, being just an
hour and fifteen minute drive from Adelaide and now from
(10:50):
the international airport. All of these things people will see.
There's been a safe place, particularly for younger families that
are moving into the region wise, really for all age groups, safe, environmentally,
beautiful and location. It's been like a magnet in a way.
It's been a long hell but hidden gem, and it's
(11:14):
just since COVID got onto people's radar. So we've become
very much a destination for people moving into the state
and particularly our.
Speaker 6 (11:24):
Region, and i'd imagine that demand it's been difficult to
be able to keep up with supply. How have you
found that balance?
Speaker 5 (11:30):
Yeah, I mean it's really interesting and quonderable at the
moment because there are a whole lot of people that
always like to maintain the status quo and aren't all
that keen on change, but change, whether you like or not,
is inevitable, and the area is developing rapidly, and particularly
since COVID, it's very much come to the four what
(11:53):
the handbrake and all any development, and not only here
but anywhere around the state, around the country, fat Man.
Or is that being able to have the infrastructure to
keep pace with development? So particularly water sewerage been the
two biggest hurdles developers are saying.
Speaker 6 (12:11):
So you mentioned some key aspects of infrastructure within that.
Looking further to other community infrastructure like schools, for example,
and other businesses that have been popping up as well,
have you seen a significant increase in those or has
it stayed relatively stagnant as people continue to flood in.
Speaker 5 (12:26):
It's a good question, but I do know that for
the last well it'll be at least ten years, that
schools have almost been at capacity, and they've been in
constant building programs, encounter luser and building a new or
just finished building a new middle school. Investigator has been
building the Victor Harbor High School has been any classrooms,
(12:50):
so all of the schools are increasingly busier. Investigator, of
course opened the school over in Gulber as well. So
a lot demand fueled by younger families moving into the region,
which is a really exciting thing. Is sort of changing
that old paradigm or turning it on its head of
being the retirement village of the say, it's far from that,
(13:14):
and there's a lot of diversity in the age groups
moving into the area.
Speaker 6 (13:18):
And finally, with all of the work that is being
done to try to increase supply, do you still anticipate
that we are going to see housing prices, particularly around
the South Coast and Flurio area. Do you anticipate that's
going to continue to go up and up until we
find somewhat of a better balance.
Speaker 5 (13:33):
I mean, we've had amazing growth since COVID has been
witnessed nationally, but particularly in our region. It's not unusual
that anybody would have double their price over the last
four or five years. And what we're finding now is
that we're entering what i'd call more of a normal market.
Our days on market starting to blow out a bit,
(13:54):
getting longer, by us are being quite the rush they
were to buy it. There have been a bit more
to certain you know, there's a lot of financial pressures
on people at the moment. So whereas in the past
everybody was rushing in doing cash contracts and what have you,
now are seeing a lot more subjects to finance, subject
to sale. So that is, you know, I think our
(14:14):
prices but I think we're holding holding, certainly at a
really high level, but things don't keep going up, and
particularly in the rural sector, the lifestyle, hobby farms and
what have you, we like the rest of the state
have been definitely affected by the drought conditions, so that's
put a little bit of a handbreak in those areas.
So you know, the market is assured, but I don't
(14:38):
think it's going to keep increasing anytime soon. But likewise
I don't see it going back either.
Speaker 1 (14:43):
That's it for this week. Don't forget you can hear
iHeart Essay and the iHeart app or wherever you get
your podcasts. I'm Jackie Limb. Join us again next week
for more of the stories you want to hear. I
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