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The Exodus Continues

One of the things you’ll never get from Australian media is a Mea Culpa.

Media will never apologise for getting it wrong or causing harm or grief to the people of Australia, unless they’re legally forced to do so.

They will nonchalantly declare that the value of our homes will drop 20% or 30% or 40% in the next year – and then 12 months later when they’re proven spectacularly wrong, you’re not going to get an apology.

Because, let’s be clear, those kinds of sensationalist predictions, which are common in Australian media, do cause considerable grief in the community.

When people are dealing with Covid, high inflation, rising interest rates, climate disasters, war in Europe and earthquakes in Turkey and Syria, the mental health consequences are considerable.

The last thing anyone wants is to be told is that the value of their home is likely to fall massively.

If you’re a family who recently bought a home or an investment, it causes a high degree of stress to be told – almost daily in some cases – that the asset you’ve just bought is going to be worth less than your mortgage.

If you’re planning to buy real estate in the next month or two – and then you read that values are going to fall 20% or 25%, and so you decide NOT to buy – it’s a matter of major consequence when you discover that those dire predictions were wrong, and values actually rose – and therefore you missed out on perhaps $50,000 or $100,000 in capital growth because you believed the shallow media.

And in case you think this is idle speculation, this is the exact scenario that played out in 2020 and 2021.

And it’s been playing out in 2022 and 2023 as well.

If the doomsday forecasters had been right, property values would have fallen 10% or 15% in the past 12 months. Bank economists in particular have made those sorts of forecasts.

But according to most of the major research sources, nothing of the kind has happened.

According to Domain, half of our capital cities had price rises in 2022 and the combined regions rose 3.6%.

According to PropTrack, the national average in 2022 was a 3% decrease in property values, despite all those rapid-fire interest rate rises.

And according to SQM Research, house values nationally remain 7% higher than a year ago, with particularly strong growth in the regional markets.

Which brings me to the latest item of serious misinformation that has been inflicted on Australian consumers – that the trend of people leaving the biggest cities and moving to the regions or smaller cities, is over.

Recent articles simply and emphatically have declared that it’s over.

Everyone, apparently, is moving back to the big cities.

Let me tell you, nothing of the sort is happening.

Like so much of the misinformation that appears in mainstream media, these headlines were generated by a press release from the greatest media tarts in the industry, CoreLogic.

They did a shallow analysis on some of the high-profile regional markets around Australia, like Byron Bay, noted that values had dropped recently – and interpreted that to mean that the move to the regions was OVER. Finished.

One of the more scurrilous newspapers declared: “The Australian love affair with moving out of big cities during COVID-19 has ended.”

That short statement contained a number of key errors.

The so-called love affair is not over and it’s not a phenomenon that happened during or because of Covid.

The alleged journalist who wrote this should hang their head in shame but I’m quite certain that, if it was shown to them how wrong they were, they wouldn’t give a damn.

So, here’s what IS happening.

Some of those iconic locations – like Byron Bay, the Central Coast and the Sunshine Coast – are no longer booming.

They all had extraordinary price growth over 2-3 years but that upcycle has come to an end, as it inevitably must.

But does that mean no one is moving to these regions any more, as multiple articles in media have suggested?

No, it means nothing of the sort.

It means only that that level of extraordinary price could not continue indefinitely and there has been an inevitable slowdown in those specific locations.

But elsewhere across Regional Australia, there are many locations with considerable price growth. Indeed, most locations are growing. 

According to Domain’s latest data, house prices in many regional areas across Australia are still substantially higher than a year ago.

On top of this, around 92% of regional local government areas witnessed price growth over the last quarter of 2022.

I’ll repeat that: Ninety-two percent have shown price growth recently.

Let me repeat what I have said often: the trend of people moving to regional areas is a long term trend, which started long before the Covid pandemic and the lockdowns came along.

Sydney has been losing population to internal migration in large numbers for more than 10 years.

It’s a trend that continues, because it’s about affordability and lifestyle, enabled by technology – i.e. the ability to work remotely.


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