By Jack Needham – This article was first published in Port Macquarie News
Buyers looking to purchase property in regional NSW could soon be set for more choice, with new research from Westpac showing an increasing number of regional owners are looking to sell.
24 per cent of regional NSW property owners (those outside of Sydney) are planning on selling their homes in the next five years, according the the bank, up 5 per cent from the results recorded in February this year.
Westpac’s managing director of mortgages, Anthony Hughes said that the trend was likely related to growing house prices.
“This is largely being driven by confidence in getting a good return on their home, as well as an increasing desire to live in a new area as people seek more living space,” he said.
The increased supply can’t come fast enough for agents operating in some of the country’s largest regional markets.
Ben Robinson, of Robinson Real Estate, said supply in the Newcastle market was “the tightest” he’d ever witnessed.
“I’ve done this for 30 years and its the tightest I’ve ever seen. Obviously there’s a lot of people looking to move to the region.
“[On the buy side] it’s a perfect storm. Interest rates have been lowest they’ve ever been. We’ve got first homebuyers with incentives, investors, people looking for their second home, so we’ve got every section of the market [wanting to buy].”
On the supply side, the perception that prices in Newcastle still had some way to run meant many homeowners weren’t yet willing to list.
“I think you’ve got a higher portion of people sitting on their hands and a lot of people don’t want to sell in a rising market,” he said.
Fears of being locked out of the market were also present.
“They also realised that if they sell in a high market they have to find somewhere else to live in that same market.”
Tight market conditions look set to remain for regional Victoria, with the same research indicating 16 per cent of regional property owners in that state would consider selling in the next five years – a decrease of 10 per cent on the previous period.
David Morrison of Ballarat Real Estate said supply was “definitely the tightest we’ve ever seen it” in the regional city.
“Coming out of lockdown, we thought some more people might be selling their properties but that hasn’t happened. We also thought during the end of financial year they might sell and that hasn’t happened either.”
The tight supply was due to a combination of factors, he said.
“Existing owners are riding the wave of the price growth in Ballarat, which we haven’t always seen – the market has been reasonably stagnant previously.”
“On top of that, a lot of people are moving to regional areas like Ballarat, so properties come onto the market and they sell very quickly. We put a property on the market and it goes the next week.”
The fear associated with selling with nothing to buy was also present in the Ballarat market.
“Ballarat people who are currently living here with homes see that there’s not much to buy and because of that they are hesitant to sell. People are afraid to put homes on the market at risk of not having something to move into.”
The latest data from CoreLogic suggests the trend is a national one, with listings down on their long-term average.
“The latest listings count from CoreLogic indicates that in the 28 days to June 27th, total advertised stock remained 24.4% below the five-year average. This dynamic of strong consumer demand, and low housing supply, continues to create some urgency among buyers,” Head of Research for Australia, Eliza Owen, said.
Trend toward downsizing
The Westpac data indicates that a number of regional homeowners are looking to downsize in the next five years.
15 per cent of Novocastrian property owners intended to downsize, a trend Mr Robinson said was reflected across the spectrum of buyers.
“If you’d go back 30 years people wanted 600 square metre blocks. Now I’m seeing people having one or two kids in a unit,” he said.
“People are happy to have less maintenance but be in a good area,” he added.
Developers had been reacting to this trend by increasing the number of studio, one-bed and two-bed apartments in the city centre.
20 per cent of regional Victorians are considering downsizing with many Ballarat buyers having responded positively to new townhouse offerings in the city, according to Mr Morrison.
“We’re seeing those townhouse style properties become really popular,” he said.
“I think that runs hand in hand with the council’s decision to create for more infill properties – splitting up a 600 or 700 square metre block and building two properties,” he added.