Sydney

Aussie cities and CBDs could become ghost towns as people move to the country

PHOTO: Sydney, Australia. FILE

There’s one place that people are leaving in droves and the ripple effect could see a huge change in how Aussies invest in and buy property.

Considering buying a house in the city? Read this first. Country property could be the big pivot of 2021. Do you want an apartment? In a year’s time, you might regret not buying an acreage.

The signs are already there. City house prices are up just 2 per cent in the last year, while regional prices are rising an impressive 6.9 per cent, according to property CoreLogic. That’s three times faster.

I was in regional Australia recently and there was a crowd outside the real estate agent looking at the ads in the window. Meanwhile, the closer you get to the inner city, the more you can smell the economic desperation.

City authorities are desperate to get people back into the city centres. Office workers who’ve spent the year at home need to come back, they moan. Shoppers must return!

Apartment developers are bemoaning the elevated vacancy rates in their towers. (Vacancy rates are over 9 per cent in both Melbourne and Sydney, according to SQM property research.)

But the wishes of people with skin in the game are just feathers in a hurricane of human behaviour change. The way we live is not the same anymore. The forces that glued us closer to the city centre are coming apart.

As a general rule, houses closer to the city centre have been more expensive, as the next chart shows. And the effect has been stronger in the bigger cities, especially Sydney.

Traditionally proximity to the CBD has meant higher house prices.

Traditionally proximity to the CBD has meant higher house prices. Source: Supplied

The invention of the car changed the shape of the world. Cities got a lot bigger.

Zoom is not as good as the car. But it could still have an effect.

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