It will bring a level of connection with one’s home and economic prosperity not seen since the Baby-boom 50’s. It will generate an energy that will rival the Roaring 20’s and the Swinging 60’s. And it will capitalise on numerous technological advancements of the last 2-decades.
We are less than 2-years into an exciting new era that I’m calling the lifestyle movement.
Many aspirational Australians will turn dreams into a liberating new life of improved work-life balance, higher productivity, higher wages and tranquillity from one’s home.
Real estate will be centre-stage during the evolution of this lifestyle movement which somewhat resembles Isaac Newton’s Third Law of Motion.
‘Every action has an equal and opposite reaction.’
The action resulting from the global spread of a germ meant significant restrictions on people’s lifestyle. The corresponding human reaction is to enhance and future-proof one’s lifestyle.
There’s a strong desire to convert our home into our own little oasis, to connect with natural environments, for more space and, the hundreds of thousands who now prefer working-from-home (WFH) will add creature comforts to do it in style.
With potential for it to span an entire generation, we’ll see a tsunami of home renovations, upgrades and relocations.
Urban suburbs will benefit from an unprecedented amount of gentrification while internal migration to regional Australia will keep accelerating.
We will see the highest rates of people moving home in human history.
And work-from-home (WFH) will play a dominant role.
According to official ABS / Census data, 465,300 out of 9.9 million households said ‘home’ was where they earned their income in 2016. My best guess is that, by mid-2022, approximately 2 million out of 11 million Australian households will generate their income predominantly from their home.
EMBRACING THE STRUCTURAL CHANGE
A recent survey by insurance company Budget Direct suggests that 1 in 5 Aussies changed homes in the 12-months to June 2021 and a third of those were triggered by the germ.
Global market research firm, Dynata, recently reported that more than a third of metropolitan Australians have considered moving to a regional area since the pandemic started. 1 in 6 of them (17 percent) had already committed to a move.
Dynata’s research also concluded that 4 out of 5 Millennials (79 percent) had considered a regional relocation and 74 percent reported Covid-19 as an influencing factor.
A hybrid WFH workplace model is now the minimum accepted standard for a large majority of keyboard-related roles in every industry.
One of Australia’s largest employers, Telstra, confirmed that 7 out of every 10 employees do not want to go back to working permanently in an office. 20 percent admitted wanting to work-from-home every day of the week.
Frankly, employers who don’t provide the option to employees will seriously struggle attracting and retaining good operators. Employers would be wise to get over their own issues of ‘trust and control’ and get with the program.
Yellow Pages publisher Thryv Australia recently flicked its Melbourne CBD office, resulting in its workforce of 500 now working-from-home on a permanent basis.
BHP, CBA, Microsoft, Officeworks, tech giant Atlassian, and global accounting firms Deloitte and PwC have recently changed their workplace policies giving all staff the option of working from wherever they want.
In October 2021, the Property Council of Australia described the work-from-home trend as “a threat to the CBD economy.”
Australia’s biggest property developer, Meriton founder Harry Triguboff, recently expressed concern about the future for big city CBD’s. Even with vaccines and the pending recommencement of overseas migration, Triguboff suggested it was clear there will be less people working in cities and there will be a plethora of empty offices.
According to the ABS, 40 percent of employed people were working from home during the period September 2020 and June 2021. 64 percent of Australians employed as managers and professionals now predominantly work from home.
A major structural change to Australian real estate is underway. The traditional fried egg town planning and economic model is already being scrambled.
TRANSFORMING HOME INTO AN ‘OASIS’
Demographer Bernard Salt says the home will now play a more central role in everyday life and attract “a greater share of the wallet to the technical and lifestyle embellishment.”
Whether one completes a significant renovation to their current home, upgrades to another nearby dwelling or completely moves town, this lifestyle movement is an incredibly exciting era for aspirational Australians.
The ability to implement this lifestyle movement is made possible by the record-high financial capacity among Australian households.
Equity in one’s current home increased by 20 to 40 percent over the 2-years ending 2021. Squirreled away in offset and redraw accounts is $230 billion cash in household budgets, and home loan interest expenses are a record-low 4.7 percent of household income.
PROPERTY MARKET IMPACT
While increased suburban gentrification is occurring in many locations across Australia, the biggest beneficiaries of this lifestyle movement will be among the 200 individual regional cities and townships.
The combined population of Australia’s eight capital cities declined by approximately 17,200 during the first 12-months of the germ arriving on Australian shores while the population of regional Australia increased by an impressive 51,200.
In each and every year of the 20-years that the ABS has recorded regional population movements, more Australians said ‘too-da-loo’ and relocated away from capital cities to regional locations than going in the reverse direction.
The large critical mass who have been making the most of regional relocations will get bigger and bigger every year. WFH and the emotional effect from lockdowns will guarantee it.
While the international border was closed, more Australians enjoyed a regional holiday. For some, the regional lifestyle became akin to a handful of salt and vinegar chips – once they had the taste, they couldn’t get enough of it. WFH opens up all sorts of possibilities!
A recent survey conducted by Property Investment Professionals of Australia concluded that the pandemic prompted 21 percent of people to consider moving town.
25 percent of PIPA respondents said their motivation included not wanting to live in crowded cities anymore while 42 percent nominated WFH as their reason.
Many regional locations have local economies that have been stronger than capital cities for several years. This economic strength is underpinning Propertyology’s buyer’s agents reason for investing in real estate in various regional wonders.
Australia’s best property market performers over the last 5-years were in regional locations. The outlook is even better.
I anticipate that rates of job growth will continue to be stronger in many regional communities.
When comparing November 2021 to directly prior to COVID, there has been a 64 percent increase in the volume of jobs advertised in regional Australia, significantly more than the 48 percent in capital cities.
TRANSFERENCE OF DEMAND
Many of those who participate in this lifestyle movement are taking their existing job with them.
When they do that, there is a transference of (both) housing demand and household spending from their former hometown to their newly chosen paradise.
Online real estate search activity confirms that Tasmania, one of the most special places on planet Earth, is high up the list of future location beneficiaries from this lifestyle movement.
Hobart’s success has already been well documented, but an increasing number of people are appreciating the truly special regional city of Launceston.
In New South Wales, townships in the Northern Rivers region, the South Coast, Albury, Armidale and Orange will grow in popularity.
The beautiful Gold Rush city of Bendigo, Geelong, Torquay, Warragul and Warrnambool will be among Victoria’s biggest beneficiaries.
Queensland, Australia’s most decentralised state, will have the highest number of locations to benefit from this new era. From the tropical paradise of Cairns and Townsville to inland beauties like Scenic Rim and Toowoomba. And the Sunshine, Fraser and Gold Coasts are longstanding migration beneficiaries.
This lifestyle movement promises to be a liberating and exciting era.
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