Country life is proving far from sleepy as surging populations and booming domestic travel revitalise regional economies. The number of people moving from city to non-metro areas now sits 20% above the pre-covid average, new data from the Regional Australia Institute (RAI) revealing internal migration had accelerated in the past year to peak in the first quarter of 2024.
At the same time local tourists are back en masse. Over the past four years Australia’s domestic travellers have pumped $108 billion into the economy to the benefit of a host of regional sectors from transportation and hospitality to fast food and healthcare.
Second wave
Analysts see the current spike in internal migration as a “second wave”, a fresh trend following the initial pandemic-triggered exodus of city dwellers to more relaxed rural lifestyles. This time however, the RAI’s annual Regional Movers Index (RMI) indicated a “societal shift”, researchers said.
"This movement in population can no longer be seen as a quirky flow-on effect from the lockdown years," RAI CEO Liz Ritchie said. CoreLogic’s Eliza Owen added that a large proportion of the current sea-changers were young couples and families being priced out of inner-city areas. “So, you’re seeing more people look to outer suburban and regional markets, once again," Ms Owen said. "It's almost like a second wave of this push from the capital cities. But this time it's not because of lockdowns, it's because of affordability constraints."
Big boost
The city’s loss has, however, been the region’s gain. Among regions benefiting most were the South Coast, Wagga Wagga and Dubbo in the west, and Port Macquarie and Newcastle/Hunter on the north coast according to agents. Best performing sectors were fast food, early education, healthcare/medical facilities and convenience retail along with government premises, large format retail, industrial and supermarkets.
Booming domestic travel boom had helped fast food outlets nationally increase revenue by 25% in just two years according to auction house Burgess Rawson. At the same time, investor demand for fast food assets was outstripping supply. “These properties are among the most tightly held investments and are typically snapped up quickly when offered to the market,” said Burgess Rawson National Partner Yosh Mendis.
Mr Mendis is expecting heightened interest for the auction next month of an expansive new fast-food portfolio on the south coast, one of the largest to be offered in NSW in years. Located in the newly completed Bayview Centre in Warrawong, south of Wollongong, it has secure leases to McDonald’s, Hungry Jack’s, Starbucks, Oporto, Dominos and Liquorland. Over 77,000 cars pass the site daily, while the large format retail Bayview Centre itself has 100% occupancy and a swathe of national retailers as tenants, from JB Hi-Fi to Super Cheap Auto. The Bayview Centre fast food portfolio will be sold individually at Burgess Rawson’s August 6 portfolio auction at Sydney Opera House.
Elsewhere on the South Coast, industrial assets were far and away the best performing, said Mathew Ivanoff Director of Raine & Horne Commercial Wollongong. Buying and leasing had also surged this year as businesses sought to relocate from the Campbelltown Basin and local operations looked to expand. “Business owners are moving to the South Coast for lifestyle reasons and are either buying or leasing local properties,” Mr Ivanoff said.
Go West
Industrial was also leading robust commercial markets in the major western NSW regional towns of Wagga Wagga and Dubbo. “Industrial sales and leasing have been exceptionally active over the past six months with our office transacting a record number of sales in the sector,” said director of Raine & Horne Commercial Wagga Wagga Craig Tait, adding that activity was also pushing up prices. In Dubbo, a scarcity of standalone warehouses was driving the sector, while rising land costs and a limited supply of shovel-ready industrial-zoned land releases by developers was elevating values.