More Australians are appreciating better lifestyles in locations outside of capital city areas. Real Estate Buyers Agents Association of Australia say with property prices cooling in several major city markets, downsizers particularly are seeing the appeal of regional property locations. Cash up and move on – but where to. Cate Bakos from REBAA tells us.
Cash up and move – but where? – Cate Bakos
Kevin: Well, with an ageing population, more and more Australians are appreciating better lifestyles in locations outside the capital city areas. And of course, affordability is driving a lot of that. That is supported by some comments made by Australia’s leading professional body representing independent buyer’s agents. Real Estate Buyers Agents Association of Australia, vice president, Cate Bakos joins me. Cate, thanks very much for your time.
Cate: It’s always great to have a chat with you Kevin.
Kevin: Yeah, I’m really keen to talk about regional areas. We’ve done that quite a lot with Simon Pressley from Propertyology, who’s always been a strong advocate of people looking into the regional areas, if they’re looking for affordability.
Kevin: But it’s so interesting to see, with our ageing population, so many more senior citizens are looking at downsizing.
Cate: Yes, you’re absolutely right, and we’ve had a recent study and members have contributed with some of their findings. And we can see across the board, particularly in regional centres in our Eastern States, that there certainly is an apparent trend.
Kevin: Okay, well it’s, we’re hearing that it’s costing 8 to 10 times the average income, just to buy a medium priced house in say Melbourne and Sydney, yet it’s so much more affordable. I think too, transportation has helped and the internet has opened up a lot more opportunities for people to keep in touch with family, from regional areas as well.
Cate: You’re right. And, we’ve got cheaper travel and, certainly for those who are still in the work force, working from home arrangements and more flexibility has really aided these tree change and sea change ideals.
Kevin: I know, too, in your study, that you looked at the comparisons between the last two census. What are they called? Censuses? That’s
Cate: I’m not sure.
Kevin: Yeah, whatever. Whatever the plural is for census.
Kevin: A huge number of people have actually relocated away from the capital city locations, Cate?
Cate: That’s right. Despite falling house prices, there’s still very expensive areas for people who have the option to be in a regional area, because the value for money that you can pick up, if you do move out of the capital city, is quite noticeable.
Kevin: Yeah, Simon Pressley’s made the point too, over the years in promoting the regional areas, that it’s … it gives you a lot less stressful environment as well. And, some of those non capital city areas, are really doing quite well, economically.
Cate: They certainly are, we’ve seen job creation and obviously with tree changes and sea changes, and those who are self employed, we’re also seeing private opportunities opening up. And, no doubt, there’s health and education as a result of population increases. And, you know, Simon’s such a wonderful data person. I admire his work, and he’s done extensive work in many regions and it is important to note, he makes this point often, it’s not just a case of looking at one particular driver, you need a combination of growth drivers and they’ll need to align and demonstrate that an area has not only an increasing population, but reason for that to, for it’s growth to be sustainable.
Kevin: Cate, what has your research shown you about the reasons why people want to downsize? What are the benefits?
Cate: Yeah, there are a couple. So, for some it is about changing gears and not having life in the fast lane. Or, for young buyers it might be raising their family, in a beautiful area, where they still have amenities around them, but they’re obviously not paying city prices. But, for the downsizers, and this is the segment that we’re talking about today, it certainly, it is a move to preserve some cash if they can, so a lot of people sell out of Melbourne and Sydney and they’ve got sizeable sale prices and chunks of money to then invest into their retirement plan. And if they’re moving into a regional property, chances are, they won’t be downsizing the quality of the dwelling, they’ll just be taking a step away from the city and changing their lifestyle, and having some money in the bank.
Kevin: Yeah, I sometimes think that ‘downsizers’ is the wrong word to use, cause you get the feeling that it’s like downsizing in quality or downsizing in size, but it’s a combination of a lot of things. You know, with baby boomers now, they got so much capital in their own property, especially if it’s in the cap city area, that they’re actually quite wealthy.
Cate: You’re absolutely right. And, it does depend on where they are in their life stage. I mean, if they’re getting on and they really want something that is low maintenance or if they’re really enjoying their money and travelling a lot, they tend to use the term, lock and leave, that might mean that they’re not on acreage, they could have a townhouse by the water. So, there’s lots of different types of properties and ideals that baby boomers will go for, but we certainly can’t just refer to it as downsizing. Because, I think, some of them are really upgrading. I’ve seen some superb purchases when they’ve been able to sell out of capital cities, and change they’re lifestyles.
Kevin: Your organisation, Real Estate Buyers Agents Association of Australia, has got members all around Australia.
Cate: We do.
Kevin: Are there any states or territories that stand out more in terms of, you know, these popular regional areas?
Cate: Wow, that’s a good question. I couldn’t say states that stand out more, I mean we’ve had some fantastic insights from our Northern Queensland member, Jennifer, and she certainly talks about what she’s seeing at the coal face in Cairns, we’ve got members in the Sunshine Coast, the Gold Coast. We’ve even, we’ve got a member in Tasmania, who’s been able to tell us a little bit about what’s going on there. I think across the board, it’s an enormous amount of insight that we have and we certainly all swap notes and share what’s going on and we stay in touch on our forum. But, no, I wouldn’t necessarily say that we’ve got one state that stands out. Obviously, Queensland’s got a lot of commentary though.
Kevin: Yeah. Well your backyard, of course, is Melbourne, Victoria. That’s tipped as being one of the biggest capital cities in Australia in the years ahead, and certainly is struggling a little bit with affordability. Now what are you finding in Victoria, are some of the common areas?
Cate: Well, interestingly, we’re seeing our major regions out preform Melbourne over the last year and a half, and that’s not a shock. Melbourne has had a correction. But, we’re certainly seeing some sustained growth, and Ballarat, Bendigo and Geelong have continued to grow in value. We are seeing jobs created in all of those regions. We have other regions in Victoria as well, but they’re the three major ones. On seeing some tree change adaptation into Geelong, with working families, and the fact that Geelong is only an hour on a train, or an hour commute from Melbourne, means that it’s a realistic option for people who want to keep their jobs in the city. And, when we contrast, certainly Ballarat and Geelong, to Sydney, Newcastle or Wollongong, Ballarat and Geelong are actually very close to Melbourne, in contrast. So, there’s no shock there that these regions are now being embraced and they’re actually growing.
Kevin: I’ve been talking to Cate Bakos, who is the vice president of the Real Estate Buyers Agents Association of Australia. Cate, once again, thank you very much for your wonderful insight.
Cate: Always a pleasure, Kevin. Thank you.