Northern end of Central Coast, Lake Macquarie is one of the top 5 most popular regional destinations for people leaving capital cities
Source: Haven Magazine Autumn Edition
It’s a question more homebuyers are answering with a resounding “yes”, as new research shows spiralling housing prices in capital cities have outstripped the advantage once offered by higher wages.
Despite earning thousands more than their regional counterparts, some city workers can end up worse off due to higher mortgage costs, according to a report from not-for-profit economic think tank e61 Institute.
After crunching the numbers using wage data from 2022, e61 found workers in the care and service industries, along with those in blue-collar jobs, had the most to gain by ditching the city for regional centres.
Workers such as paramedics, childcare workers and administrative assistants earned on average $2620 more in cities, but once housing costs were taken into account, they could end up $8250 a year worse off than their regional counterparts.
The difference was even more marked for those in jobs such as truck driving and labouring, where city-based workers actually earned less than their regional peers, leaving them on average about $10,000 a year worse off.
It was still almost lineball for knowledge workers, who had large wage advantages chewed up by housing costs. According to e61, city-based professionals such as doctors, accountants and graphic designers earned an average of $13,730 more than their regional equivalents, but ended up only $700 a year better off once housing costs were factored in. In the past decade, a steep rise in city prices has eroded much of the urban wage advantage knowledge workers used to have. Back in 2012, they would have been more than $11,000 better off in capital cities.
But for many movers it’s not just the comparable cost of housing. The bang-for-buck factors such as bigger blocks and larger homes prompt many to move.
This search for space may also be the reason demographers say migration from capital cities to regional areas is dominated by millennials (now aged 29-44), who may be looking for quality of life as they start families and their priorities change.
This drift away from the capitals is a trend that demographers noted at the end of 2019, but has been turbocharged by greater workplace flexibility. It remains high, with the number of people relocating from capital cities to regional centres up 20 per cent on pre-Covid levels, according to tracker Regional Movers Index.
What cities are on the wane?
Not all capitals are losing residents at the same rate. Sydney and Melbourne together account for 95 per cent of net population outflows from Australia’s capital cities in the September quarter for 2024.
Unsurprisingly, Sydney, Australia’s most expensive capital, accounted for the largest chunk of that outflow at 57 per cent, while residents leaving Melbourne accounted for 38 per cent of total numbers leaving capitals.
And where did all these city escapees head to? Overwhelmingly the east coast: south-east Queensland was a popular destination, while regional NSW and Victoria were favoured by those leaving Sydney and Melbourne.
Regional hotspots
According to the latest data from the Regional Australia Institute, the top five most popular regional destinations for people leaving capital cities are:
- Sunshine Coast, Qld (retained number one spot for nearly two years running).
- Greater Geelong, Vic.
- Gold Coast, Qld.
- Moorabool, Vic.
- Lake Macquarie, NSW.
The fastest movers, judged by largest annual percentage increase in migration from capital cities are:
- Bunbury, WA.
- Moira, Vic.
- Scenic Rim, Qld.
- Wangaratta, Vic.
- Murray Bridge, SA.
What to consider?
For some, a move to the regions can be a case of having it all, with flexible work offering the advantage of picking up a city wage while living outside the city’s premium price zones. Regions within a couple of hours’ commute of capitals are popular with those who only need to be in an office one or two days a week.
However, permanently relocating from a busy capital city can be a culture shock, particularly for parents who may be moving away from social support networks. So, a few things to consider about regional destinations include:
- What is the community like? Are there organisations to join to help integrate and meet other locals?
- Is there sufficient access to services, shops and cafes? Specifically consider medical facilities available and the quality of internet infrastructure (especially if working remotely).
- Are there sporting, school and social opportunities for children and teenagers? Families who make the move should consider how the location will work as their children grow older.
- Housing may be cheaper, but food may not. Many regional areas pay more for groceries due to the transport costs involved and limited competition from local retailers.
- How will it impact career opportunities?
As migration to regional Australia climbs, experts believe it will continue to build on itself, as larger, more diverse populations attract more commerce, services and jobs to regional centres. Ultimately, as more people consider regional areas, they present opportunities for a different lifestyle and potentially lower living costs. However, factors such as local infrastructure, job opportunities, and personal circumstances should be carefully weighed before making the move.
