Since the COVID-19 pandemic began, there has been anecdotal evidence suggesting that Australians are fleeing from capital cities to the regions.
For example, the Australian Bureau of Statistics (ABS) latest internal migration data shows that Australia’s capital cities lost around 22,000 residents in the June and September quarters of 2020, led by sharp falls across Sydney and Melbourne:
Sydney and Melbourne suffered a sharp decline in residents in Q2 and Q3 2020.
Regional property prices have also recorded 9.4% growth in the year to February – their strongest annual growth since August 2014:
Regional dwelling values are booming, according to CoreLogic.
Finally, rental growth across Australia’s regions is also easily outpacing their capital city rivals:
Regional rental growth was more than double the capital cities in the year to February 2021, according to CoreLogic.
Therefore, judging by the above, it would be easy to conclude that Australians are fleeing capital cities to live in the regions.
However, Deloitte’s economics team has a different take. Their latest Weekly economic briefing shows that the growth in regional population is not being driven by people leaving the capitals, but by people no longer leaving the regions for the cities:
There is also discussion that people are leaving the cities for the regions, and while net movements from capitals to regions has increased in recent quarters, it doesn’t tell the whole story. The chart below shows the cause of this is fewer people leaving the regions rather than more people arriving in the regions. So, it’s not a story of people fleeing the cities, but rather a story of people staying in the regions.
COVID has stopped people from leaving the regions for the cities.
Deloitte believes this is important because once COVID vaccinations have been rolled out, and society returns to normal, old migration patterns of people leaving the regions for the cities are likely to resume.
Thus, COVID has not caused a ‘flight to lifestyle’ in the regions, but rather “the regions have only temporarily extended their stay and will still leave”. In turn, “regional Australia will need to focus on keeping current populations as well as attracting people away from the cities”.
