Has COVID-19 changed real estate forever? The answer is of course, yes and of course, no. COVID-19 has changed the way many people work and live. Some of these changes will be temporary, some will be permanent.
Traditionally, millions of people have chosen to live in areas that didn’t necessarily deliver their ideal lifestyle but did provide convenience. If you had to work in the CBD or a commercial hub and didn’t want to spend hours a day commuting, you had to find a place that was a reasonable drive or on a good public transport route. Then, you’d hope to save enough money to one day buy a getaway; or wait years until retirement to eventually live where you really wanted to.
Moving forward, many people will cease their daily commute and jump on the cyber highway (after a morning swim at the beach) instead. Put simply, many people will never return to a full-time centralised work environment again. At least, not five days a week
From a lifestyle perspective, this creates a host of benefits and new opportunities. Why live above your financial means in a crowded urban environment if you can work remotely and meet online from the Mornington Peninsula, Central Coast or Sunshine Coast?
What about the market? Surely a global pandemic is cause for a material re-adjustment in home values and the highly publicised “major correction to Australian prices” that the doomsayers have been erroneously predicting for 40 years?
Well, my prediction is in the opposite direction. I think there’s every chance that a small, short term correction might land for six to 12 months – something in the order of 5%. But the most in-demand markets that offer people what they want are about to take off again.
With interest rates approaching zero and many owners having deleveraged in the past few years, I envisage increases in well-located prime residential real estate in major cities and regional lifestyle areas – that is, anywhere near surf, waterways or lots of trees within 90 minutes of the big East Coast cities.
Here are my top picks.
Sydney & surrounds
Many Sydneysiders might remember when this suburb was best known for its abattoir yet since its closure in 1988 this area has been quietly reinventing itself into a prized address. Sample some of the best eateries in Sydney or stroll across the road to Sydney Olympic Park for any number of sporting or cultural events. Oh, did I mention that the WestConnex tunnel has just shifted Homebush residents about 15 minutes closer to town?
This gracious garden suburb has long been one of my favourite locations and an area I’ve steered many of my friends into in the past few years. Where else can you be a stone’s throw from the CBD, on a large allotment in a period home with some of the best coffee and delicatessens in the land on your doorstep!
Once upon a time, you had to choose between a movie star lifestyle on the Northern Beaches or easy access into the CBD. Well, now that the game has changed with remote work, you no longer have to wrestle with the Spit Bridge every day. So, why not choose the movie star lifestyle and enjoy a dip before work in Sydney’s next beachside suburb to boom?
In the heart of the burgeoning north west corridor Rouse Hill and its town centre retail village have presented a compelling lifestyle for young families looking for clean air, more land, better value for money & a (now) easy commute to the CBD via the Sydney Metro Northwest.
Read all the things I said about Rouse Hill and you can apply them to Edmondson Park and get some change left over. The newly minted M8 is bringing its residents 15 minutes closer to the CBD if you choose to drive.
Thirroul (Regional NSW)
With COVID-19 changing many people’s minds about working remotely, you’ll see little lifestyle gems like Thirroul in the Illawarra region take off over the next few years. Sitting on the seaside, only a few kilometres from Wollongong and a very easy commute to the big smoke, this lifestyle will become more in demand from savvy locals, Sydney executives and nearby Empty Nesters in search of the ultimate sea change.
Noraville (Regional NSW)
Where, I hear you say? Well, go to Google and check out this quiet little village just north of Sydney on the booming Central Coast. With the pandemic showing everyone how easy it is to work from home and the new NorthConnex lopping 20 minutes off your trip to town, you’ll make great money over time securing a cottage in this charming seaside suburb for the price of a one-bedroom apartment in Sydney.
Brisbane & surrounds
Located in Brisbane’s bayside area, about 45km by car from the CBD, it has a country town vibe with city amenities. New infrastructure improvements have begun following approval of Lendlease’s multi-billion-dollar Shoreline residential community. A new marina is also being considered.
This quiet, family friendly suburb appeals for its generous blocks. It has modern playgrounds, open green spaces, quality schools and easy access to Springwood, Sunnybank, Garden City, Carindale and Brisbane CBD via the Gateway, Pacific and Logan Motorways.
A blend of convenience and neighbourhood friendliness defines the lifestyle on offer in Toowong, which is less than 5km from Brisbane’s CBD. Its diverse range of housing means it appeals to both young and mature buyers. Plans for a new $450 million town centre modelled on The Grove in Los Angeles have been lodged and will modernise the suburb whilst generating new jobs and services.
Sunrise Beach (Sunshine Coast)
The lesser known sibling to Sunshine Beach, it hasn’t had the same rate of growth that its famous neighbour has experienced in the past three years, with the median house price about 45% cheaper at $975,000. However, things are changing with original beach houses being renovated and new listings becoming scarce.
Burleigh Heads (Gold Coast)
I think the authenticity of Burleigh Heads is a thing of beauty. But change is inevitable and as the modernisation of the Gold Coast beachfront naturally creeps further south, this laid-back coastal hub is next in line for a growth spurt. Major developments have already been earmarked.
Melbourne & surrounds
Earmarked as an up-and-coming suburb for many years, Thornbury is a cultural melting pot popular with hipsters, professionals, young families and older migrants who moved in decades ago. On average it’s $200,000-$350,000 cheaper than neighbouring Northcote and Fitzroy North but still offers the same great city access. It has its own parochial buzz and its local schools have a great reputation.
All eyes are on Sunshine as the Victorian Government completes a business case study on its suitability as the preferred route for Melbourne’s $13 billion 27km Airport Rail to the CBD. If it proceeds, Sunshine will become a super transport hub. The Sunshine Super Hub will also become a gateway to regional Victoria under the broader Western Rail Plan, which includes the fast rail to Geelong and Ballarat. Identified as a State Government priority precinct, Sunshine will receive a significant boost to infrastructure, health services and education facilities over the next seven years, which will generate thousands of jobs and service the region’s growing population.
The median house price broke the $2 million mark in the June 2020 quarter but apartments are affordable at a median $677,000. Only 6km from Melbourne’s CBD, Hawthorn is surrounded by some of the city’s most expensive and prestigious suburbs including Toorak, Camberwell, Kew and Hawthorn East. Apartment owners benefit from the same lifestyle perks and amenities of these illustrious neighbours but without the price tag.
Coburg North is benefitting from the ripple effect of rising house prices in neighbouring Coburg and Brunswick. It is popular amongst 30-somethings with a large Italian and Greek community creating a wonderful cultural combination. The median house price is $170,000 cheaper than Coburg.
Kilmore (Regional Vic)
Young families seeking a country lifestyle within commuting distance of Melbourne are being drawn to Kilmore. The median house price is $443,750, almost 45% cheaper than Melbourne and the trip from Kilmore East Station to Southern Cross Station takes just an hour. Services and amenities include a golf course, hospital, council-owned gym and pool, cafes and shops.
Filled with beautifully preserved original post-war housing, Ainslie is a highly desirable inner-city suburb known for its lifestyle and community values. There’s also a vibrant local arts, music and cultural scene.
Located in Canberra’s Woden Valley, Chifley is the epitome of convenience. It is 2km to the sprawling Westfield Woden, restaurants and bus transit station and seven minutes to Canberra Hospital. Located between two main arterial roads, the Tuggeranong Parkway and Melrose Drive, accessibility is attracting a new generation of buyers.
Bonner is one of Canberra’s fastest and largest growth areas and is lauded for its wide roads, sports facilities, state-of-the-art Neville Bonner Primary School and the $30 million Amaroo Group Centre.
Change is happening in Yarralumla, an embassy suburb 3km from Parliament House and Government House. An increase in original houses listed for sale in the first half of 2020 suggests the existing demographic (35% aged 60-plus) is being replaced by a new generation. Immaculately maintained bicycle and walking paths traverse the northern boundary along Lake Burley Griffin in one continuous 19km loop.
Much-needed upgrades to footpaths and pedestrian crossings in Narrabundah have been prioritised as part of the ACT Government’s fast-tracked COVID-19 construction recovery program and will do wonders for the streetscape. The highly regarded Narrabundah College is undergoing a multi-stage modernisation worth $25.75 million over four years, mirroring the broader gentrification of this 1970s suburb. It is also sought-after for its larger residential blocks, preserved green spaces, parks and gardens.
Located in the inner south of Adelaide there is a high demand for character homes and architecture in this suburb.
Only 10km away from the CBD, Rostrevor is located in the north-eastern corridor (Tom’s patch) of Adelaide. It appeals to families looking for bigger land and there are good schools in the area.
Located about 2km west of the Adelaide CBD it is a great location for young families.
Perth & surrounds
Fremantle is an eclectic village driven traditionally by the maritime industry, although the Western Australian government is considering moving the Fremantle port in 2032. There are a number of lifestyle benefits including the Little Creatures Brewery, diverse restaurants and marinas.
Rossmoyne, Shelley and Willeton
Close to Swan River and Perth, part of the appeal of these three suburbs is the school catchment zone – Rossmoyne and Willeton Senior High Schools are sought after. There have also been favourable zoning changes allowing for subdivision in some cases.
Within three hours’ drive of Perth Bunbury is attracting sea change buyers and its close proximity to Busselton (Margaret River) Airport is appealing to FIFO workers. There are also favourable government concessions to buy land and build a home.
This is an edited extract from The McGrath Report 2021, republished with permission. The picks for Adelaide and Perth were provided directly to Canstar and do not appear in the report.
Cover image source: Taras Vyshnya (Shutterstock)
About John McGrath
John McGrath is founder and executive director, McGrath Estate Agents. He was honoured by the Real Estate Institute of NSW with the Woodrow Weight OBE Award, a lifetime achievement award for his outstanding contribution to the real estate industry. John was a founding director of the REA Group and served on its board from 1999 to January 2018.