- Victoria’s net population fell by 44,700 people over the fin year
- But Queensland’s increased by about 45,900 over the same period
- Single industry areas, such as tourism, generally don't make sound investments
Amongst the myriad changes to how we live and work this year, there has also been a marked increase in the property investment popularity of holiday locations.
It wasn’t that long ago that any property investment expert would give holiday spots a wide berth because they generally had singular industries – that is, tourism.
That’s because one of the fundamentals of strategic property investment has always been to purchase in locations that have diverse economies.
However, since the start of the pandemic, there has been an exodus of people away from capital cities to regional areas, including coastal holiday locations, generally because of their ability to work from home.
Aussies on the move
The Australian Bureau of Statistic’s National, state and territory population report for the year ending June 2021 shows this trend in action.
According to the dataset, Victoria’s net population fell by an astonishing 44,700 people over the year, while Queensland’s increased by about 45,900 over the same period.
Most of the losses in Victoria were due to net overseas migration out of the country of some 56,000 people as well as a net interstate migration loss of about 18,300 to other parts of the nation as well.
New South Wales fared better with its net population increasing by 22,000 – due to net natural increase – over the same period, however, it did lose about 5,500 to new overseas migration as well as about 16,600 to net interstate migration.
At the other end of the spectrum was Queensland, although it did lose about 14,300 to net overseas migration, but it also welcomed the lion’s share of interstate migrants with a net increase of about 31,000 people from other parts of the country.
Interestingly, Western Australia was the second-best performer when it came to net population growth over the year, with a rise of 17,400 people.
Will it last?
Clearly, the past two years has been a period when many people were reassessing where they live and how they work, including wanting to be closer to family once lockdowns had eased.
The explosion of people who work from home has also meant that many people don’t need to live in a big city anymore – for now anyway.
What’s important to understand is that working from home is a way of life that generally suits some people more than others, which means that only time will tell if the interstate migration to regional and coastal areas will be sustained in a few years’ time.
The robust market conditions over the past year were truly a tide that lifted all ships, with strong property price growth recorded pretty much everywhere – which is highly unusual.
Some holiday destinations have experienced price growth of 30 per cent of more as the flight to lifestyle took hold in a big way over the past year.
But does this mean that holiday homes have become the new property black? Not necessarily in my opinion.
While I’m sure that you may have visited some of the most amazing domestic holiday locations over the holiday break, that doesn’t necessarily mean that they are smart places to let your money work – even if they were buzzing with people when you visited.
However, holiday locations that also tick a number of other economic fundamentals, including diverse economies, may provide sound investment opportunities.
But those areas where the only source of income is from tourism (or any place with one solitary industry holding up its economy) do not typically make a good investment.
Savvy investors would be wise to remember this while they reminisce about the incredible family memories that were made over the holiday period.
