Regional house prices have been the major winner of the COVID-19 pandemic according to a property economist, and the end of Sydney's lockdown could see values grow further before the year is out.
Ray White Chief Economist Nerida Conisbee said that record levels of net migration into the regions from Australia's capital cities had led to a significant increase in prices.
"A quarter of suburbs that hit $1 million medians last year were in regional areas, ranging from Anglesea in Victoria to Redhead in Newcastle," Ms Conisbee said.
"For decades, government policy has aimed to move people out of congested capital cities and into regional Australia. While this has had some success, it was nowhere near as successful as Covid," she added.
While growth in regional house prices had been consistent during the pandemic, Ms Conisbee said that the prolonged Sydney lockdown could contribute to further price spike in some areas toward the tail end of the year.
"It's possible, one of the things we found in Melbourne last year was that the extended lockdown did lead to people warning more space across Australia. Broadly, Covid did lead to a desire to move out to regional Australia.
"Extended lockdowns do seem to extend the trend, so it's quite possible that it could drive property in regional NSW [this year]," she said.
She predicted that some regional vendors would put off listing their properties until the lockdown had eased.
Areas Ms Conisbee predicted would see further growth in 2021 included Yamba, a coastal town 100 kilometres south of Ballina in Northern NSW.
In Victoria, towns along the Surf Coast would continue to see price increases, as well as Buninyong, 11 kilometres south of Ballarat.
The 'new normal'
As vaccination rates increase and Australia returns to a state of normality, price growth in regional areas could become more inconsistent, Ms Conisbee said, depending on whether people are allowed to continue to work-from-home fulltime or if they were expected to come into the office.
"To talk [about] regional [property] broadly is quite hard, because people [will be] getting back to work and getting back to work normally is going to lead to different choices. If you need to come in one or two days then living in regional area that's in commuter distance has appeal," she said.
"The more we return to normal life it will start to impact lifestyle areas that aren't within commuting distance of Sydney... They won't see the same price gains."
Skyrocketing prices in areas like Byron Bay, where prices had increased by more than 70 per cent in a year, would also put a dampener on activity.
"The other thing that will impact people is how expensive regional areas are getting right now, that obviously prices a lot of people out of the market," she said.