Given the choice of a tiny inner-city apartment or a spacious beachside family home at the same price, which would you choose?
With city property prices continuing to rise, many buyers are looking further afield and finding they can get a lot more for their money. One such couple is Brad and Fleur Frost, who just over a year ago left behind their life in Melbourne and set up home on the coast near Geelong.
“Now I can come home and go straight to the beach instead of sitting in traffic, how good is that?” Mr Frost said.
“It was about getting an affordable home, but it was also about lifestyle.”
As new parents in their mid-thirties, this couple is certainly not the first to make such a move. CoreLogic figures show a big change in the kind of people looking for properties on the outskirts of large cities recently.
Traditionally a move made by baby boomers, the sea change effect is now taking hold of a younger generation too.
Cameron Kusher, a research analyst at CoreLogic, has done what he does best and analysed some research (ABS migration data, to be precise), noting a sharp increase in people moving to coastal towns and other “lifestyle markets”.
“Sea and tree change appear to be the long forgotten buzzwords for the migration of people to coastal and lifestyle markets. This trend was particularly strong before the financial crisis hit in 2008, however, since the end of this occurrence, we saw interstate migration slow and many lifestyle markets underperform when compared to the capital city housing markets,” Mr Kusher said.
Australia’s most expensive city experienced some of the most significant movements. Looking at the difference in new migration between 2008/9 and 2014/15, Sydney’s outer south west saw a 54.2% increase in new residents aged 25-44, while for ages 45-64 there was just a 6.7% increase.
In the Baulkham Hills and Hawkesbury areas to the north of the city, the 25-44 age bracket saw huge growth of 117.2% but for the older 45-64 group there was actually a net loss of -62.7%.
WHY THE CHANGE OF SCENE?
Gary Sweetten, a broker with Mortgage Choice who helped the Frosts with their move, has noticed that more and more younger buyers are opting to leave the city.
“Probably out of my last five clients, four of them were leaving Melbourne,” said the Geelong-based broker.
“And interestingly, I have had a few retired clients who have been looking to buy in the city. One couple who live down here but just wanted a city place to visit so they bought a little apartment in Collins Street near the theatre district. So that’s happening too,” he said.
“Comparatively you can buy a top of the range house near the water here for a price similar to a small place in the western suburbs of Melbourne,” Mr Sweetten said.
“And people are finding that in some areas down here, depending where you work in the city, the commute can almost take the same amount of time as if you actually lived 10 to 15km from the city centre,” he said.
The Frosts found that their $500,000 budget just wouldn’t stretch far enough in Melbourne.
“You just can’t get a ahead and also pay rent in Melbourne,” Mr Frost said.
“From a financial perspective it’s better now because we’re not dragged into spending money on the weekends at shops and restaurants. You can go out and eat a meal and it’s a lot cheaper — $35 is a really expensive meal here!”
The couple knew the move would give them more spare cash and a shorter commute, but they hadn’t realised how much it would impact their lifestyle. Having spent all his life in the city, Mr Frost was pleasantly surprised by the change of scene.
“It was quite a big move, but it was the best move I’ve ever made,” he said.
“You make a lot of friends pretty easily, just go for a walk down the street and you run into people you know. In Melbourne I didn’t know any of my neighbours, not a single person, not since I was a kid anyway,” he said.
Mr Frost, who works in the building industry as a travelling sales rep, is even raving about the health benefits of the move.
“I’ve got a bit of a high pressure job, so if I’ve had a bad day I just go down to the beach for five minutes and breathe in a bit of fresh air and it’s like your problems have just gone away. You don’t take the stress home with you,” he said.
WHO IS ON THE MOVE?
Back to number-cruncher Mr Kusher. He looked at the top 25 regions where there was internal migration (excluding overseas migration) over both the 2008/09 and the 2014/15 financial years. Of these regions, 15 could “wholly or partly be described as lifestyle regions” according to Mr Kusher.
These regions saw most movement from those aged 0-14 and 25-64 years old. There was hardly any movement in the 15-24 age group, and the over-65s fell somewhere in the middle.
“This would seemingly indicate that migration within these coastal and lifestyle markets is being driven by young families,” he said.
He believes that affordable housing in these regions is what is attracting so many new buyers, but if you’re considering a similar move you may have to act quickly to make the most of the low prices.
“In general, coastal and lifestyle markets have dramatically underperformed in terms of value growth relative to capital cities over recent years while recently we’ve started to see values rise in many of these regions,” he said.
Mr Kusher referred to the “deterioration of affordability” in cities as the main reason for people abandoning the metropolitan lifestyle.
“Based on the latest ABS data, it is still too early to say that sea change and tree change has returned. However, given the ABS data is almost 12 months old, it’s likely the trend has progressed further over the current financial year as more Australians make the move to lifestyle markets.
“Given that is the case, you can be sure that there are plenty more people that are contemplating a similar move and may make one over the coming years,” Mr Kusher said.
If you’re one of them, and you need some help understanding your options when it comes to mortgages and finance, the team at Loop Financial are always here to help – just get in touch!
MAJOR MOVEMENTS FROM THE CITY TO THE COUNTRY
Melbourne west, Victoria
25 to 44 year olds 62.1 per cent
45 to 64 year olds 2.3 per cent
65 and over 1.4 per cent
Moreton Bay — South
25 to 44 year olds 53.7 per cent
45 to 64 year olds -0.4 per cent
65 and over 3.8 per cent
Geelong, Victoria
25 to 44 year olds 23.2 per cent
45 to 64 year olds 28.1 per cent
65 and over 15.1 per cent
Ipswich, Queensland
25 to 44 year olds 41.3 per cent
45 to 64 year olds 24.8 per cent
65 and over -11.3 per cent
Sydney — outer south west
25 to 44 year olds 54.2 per cent
45 to 64 year olds 6.7 per cent
65 and over -14.2 per cent
Richmond-Tweed, Queensland and NSW
25 to 44 year olds 51 per cent
45 to 64 year olds 26.1 per cent
65 and over 11.8 per cent
Mornington Peninsula, Victoria
25 to 44 year olds 38.9 per cent
45 to 64 year olds 44.4 per cent
65 and over -6.6 per cent
Perth — south west
25 to 44 year olds 40.3 per cent
45 to 64 year olds 3.3 per cent
65 and over 0.8 per cent
Melbourne — north west
25 to 44 year olds 69.4 per cent
45 to 64 year olds -14.3 per cent
65 and over -0.4 per cent
Melbourne — north east
25 to 44 year olds 89.2 per cent
45 to 64 year olds -15.3 per cent
65 and over -6.1 per cent
Bunbury, Western Australia
25 to 44 year olds 37.6 per cent
45 to 64 year olds 20.5 per cent
65 and over 9.6 per cent
Sydney — outer west
25 to 44 year olds 77.9 per cent
45 to 64 year olds -26.1 per cent
65 and over -13.3 per cent
Illawarra, NSW
25 to 44 year olds 32.8 per cent
45 to 64 year olds 17 per cent
65 and over 13.6 per cent
Perth — north east
25 to 44 year olds 94.7 per cent
45 to 64 year olds -3.4 per cent
65 and over -14.4 per cent
Sydney — Baulkham Hills Hawkesbury
25 to 44 year olds 117.2 per cent
45 to 64 year olds -62.7 per cent
65 and over 6.3 per cent
