What was once considered idyllic is increasingly becoming the reality for people. Instead of where one lives being determined by where one works, there is a shift with people now living in a location that they truly love while bringing their job with them.
When they do, they will discover an extra ten to fifteen hours per week from not having to commute to work each day. They’ll have a slower pace lifestyle a feeling from our home that closely resembles being on holiday.
The work-from-home phenomenon is a structural change which has a tight grip on Australian real estate. Mark my words, it will be one of several dominant forces to shape property markets for years to come!
Millions of knowledge-based employees have already had plenty of practice at working-from-home (WFH) due to pandemic restrictions. They have made better use of high-speed internet, cloud computing, and communication platforms such as Zoom and Skype.
Australia’s WFH Prototype
Arguably the best pre-Covid prototype Australian location for working-from-home (WFH) is Byron Bay.
A significant 13.4 percent of Byron’s workforce nominated ‘home’ as their primary work address at the 2016 Census. That is 3-times the national average of 4.7 percent.
48 percent of Byron’s workforce have occupation types which fall into the categories of professionals, managers or clerical assistants, many of whom have the potential to WFH should it suit them and their employer.
Few could question the idyllic lifestyle of the seaside township in northern New South Wales. What’s not to like about year-round great weather, beautiful beaches and a plethora of great cafes and restaurants?
Whenever Byron residents do need to go to the big-smoke, Brisbane (2-hours) and Gold Coast (1-hour) are an easy drive up the highway while the nearby Ballina-Byron airport has daily flights to other major cities.
It’s no coincidence that total passenger volumes have increased over the years such that the airport significantly improved its ranking from being Australia’s 40th biggest carrier in 1993-94 to 17th in 2019-20 [above chart].
Byron has a mature age demographic (40-69 is the largest age bracket compared to 20-54 years nationally) and a smaller portion of families with children (38.1 percent compared to 44.7 percent nationally).
Many homeowners in Byron earn above-average incomes. While Byron real estate is incredibly pricey, 36.5 percent of households have fully repaid their mortgage, superior to the 31 percent national average.
In addition to having one of the largest WFH workforces in the country, Australia’s 73rd biggest town (population 35,000) has the highest median house price ($995,000 in June 2020).
Over the 20-years ending July 2020, there isn’t a single capital city or regional location with a higher capital growth rate than Byron. The 9.3 percent annual average is well above Sydney’s 6.6 percent, Melbourne’s 7.3 percent and Hobart’s 8.0 percent.
How Will WFH Affect Property Markets?
From a property market perspective, it is completely irrelevant whether you personally might or might not WFH. What is relevant is that, when Australians complete the next Census survey on 10 August 2021, the percentage of the national workforce permanently working from home is likely to be significantly more than the 4.7 percent in August 2016.
It is anyone’s guess what the WFH population might grow to, but the scope is considerable. The evolution of the human race is clearly centred around technological advances.
Just a few examples of roles that can comfortably service their customers no matter where they live include lawyers, accountants, journalists, mortgage brokers, call-centre operators, engineers, marketing consultants, web designers, analysts, graphic designers and Propertyology.
Imagine if Australia’s total WFH workforce increased to just 10 percent. That would mean that, in a country with 10.5 million households, 1.3 million people would be earning their income with ‘home’ being their workplace.
The traditional fried egg town planning model will become scrambled.
Those who decide to adopt permanent WFH as their way of life are opening up a new world of flexibility and opportunities which includes the ability to live in a location that they truly love, much like those living in Byron!
Locations With WFH Credentials
Byron won’t be everyone’s cup of tea. And few can afford to buy real estate in a town with Australia’s highest median house price. But a beautiful gift created by the societal circuit-breaker known as Covid-19 will be the evolution of a bunch of ‘alternative Byron Bays’ across Australia.
When considering where these locations will emerge, one first ponders the various (subjective) lifestyle factors that help people feel relaxed; things that holidays are planned around. Surfing, bushwalking, village life, a stroll along the beach, looking out over rolling hills and wineries, foodie cultures, mountain biking, etc.
Blind Freddy can see that there will be a transference of housing demand away from congested and expensive capital cities and towards more relaxed parts of regional Australia.
Part of the appeal of these lifestyle locations is that they don’t have high density populations. This also means that a population intake of (say) 100 to 200 people in a given year through internal migration can apply reasonable pressure on housing demand.
Propertyology’s buyer’s agents are already seeing it happen across the country.
Well before Covid-19, a net 53,000 Australians relocated away from capital cities over the 3-years ending June 2019. This chart contains a bunch of proof of internal migration trends 12-months prior to Covid-19.
In addition to Byron Bay, the Australian locations that had the highest portion of WFH employers at the 2016 Census include but are not limited to:
- Coastal locations: Surf Coast VIC (12.8 percent), Kiama NSW (11.4 percent), Noosa QLD (10.8 percent), Esperance WA (8.8 percent), Ballina NSW (8.3 percent), Bass Coast VIC (8 percent), Victor Harbour SA (6.9 percent)
- Winery and foodie cultures: Adelaide Hills SA (13.8 percent), Macedon Ranges VIC (11.1 percent), Margaret River WA (8.7 percent), Mornington Peninsula VIC (8 percent)
- Other inland wonders: Golden Plains VIC (16.9 percent), Scenic Rim QLD (12.3 percent), Maleny QLD (11.9 percent), Warragul VIC (9.2 percent), Armidale NSW (6.8 percent)
Other locations with WFH appeal include Orange, Cessnock and Albury (in NSW), Cairns, Hervey Bay and Yeppoon (in QLD), Kingscliff and Batemans Bay (in NSW), Bendigo and Warrnambool (in VIC), Hobart and Launceston (in Tasmania), and Geraldton (in Western Australia).
In this new era of Regionalisation, Propertyology is anticipating that more than 100,000 people (net) will leave Melbourne and Sydney over the next 3-years.
Since the onset of Covid-19, anecdotal evidence from research conducted by Propertyology confirms that the pandemic has already driven increased activity for people relocating to different towns.
Our buyer’s agents are currently active in a few locations across Australia wherein the WFH phenomenon is one of several drivers of both capital growth and rental growth.
GET IN TOUCH WITH US: We are helping everyday Aussie property investors to be proactive about the financial future through helping them to leverage off our thought-leading property market research and multiple award-winning buyer’s agency service. Propertyology is currently active in several (strategically chosen) locations across multiple states. The cost of a typical low maintenance property ranges from $350,000 to $500,000. Diverse and expanding local economies are driving housing demand and pushing asset values upwards while rental incomes almost always cover annual expenses. Like to know more? Contact us here.
There are very few things that are more complicated than property markets. We describe the property market of an individual city or town as like a big jigsaw puzzle with numerous pieces. Determining what the outlook for each location looks like is akin to gathering all of the pieces to the puzzle to see what the picture looks like. All day, every day. that’s Propertyology’s core business. Invest with the best!
