Regional Australia has seen less homes changing hands in what a new report is describing as a “significant reversal in pandemic-driven residential property transaction trends”.
According to the PEXA Property Insights for FY24, sales in metropolitan areas outperformed their regional counterparts in the last 12 months to June.
“Our biggest metropolitan areas, greater Sydney and greater Melbourne, saw substantial growth in property transactions in FY24, with increases of 16.1 per cent and 8.6 per cent respectively,” said PEXA Group’s chief economist, Julie Toth.
Know the news with the 7NEWS app: Download today 
“At the same time, regional markets in the same states experienced more modest gains or even declines in sales numbers, indicating a shift in buyer preferences back towards urban living.”
Biggest drops
Sales in regional Victoria dropped by 5.9 per cent over that time, the worst performer nationally.
Meanwhile NSW grew by a very modest 1.1 per cent increase in the last financial year.
“We are just not seeing that interstate and intrastate migration that we were seeing during the pandemic,” said Ms Toth.
She said that a return back to the office trend now being enforced by more companies only partly explains the trend of more sales happening in the city compared to the country.
Bigger transaction costs as housing prices rose, along with an older and more settled population were two other factors.
But the return to the office trend was having an impact.
“There are a lot of occupations where working from home is not possible, but for office based occupations the common pattern is that most businesses are settling into a hybrid model where people are expected to come to the office for part of the week,” she said.
An increase in sales in metropolitan areas was driven by ‘‘hotspots’‘ of activity in the expanding outer suburbs of big cities, particularly Sydney and Melbourne according to Ms Toth.
This came as “buyers seek more affordable properties within commuting distance of their employment, education and community needs”.
Back to the office
It was more affordable and developing suburbs on the outskirts of Sydney and Melbourne where the most sales were occurring, many of these in developments.
“Our newer urban areas are driving market growth at present,” Ms Toth said.
She said however that “growth is constrained by logistical and financial realities” which could push prices up further.
“New dwelling approvals, high interest rates, elevated construction costs and prolonged construction timelines, are all limiting the pace of new supply, even as demand intensifies,” Ms Toth said.
“This is placing upward pressure on prices and rents for existing homes.
“Australia will continue to face housing availability and affordability challenges, until we can enable a better balance between demand and supply,” said Ms Toth.
The report looks at property transactions, or sales, over the past financial year across the country, but excludes the ACT and Tasmania.
Across the nation
Overall the number of homes that sold was up across Australia’s mainland states with a total of 663,158 properties changing hands.
This was a rise of 5.5 per cent in sales compared to the same period in 2023.
Queensland had the busiest residential property market in FY24 with 180,462 residential property transactions.
This was closely followed by NSW where there were 177,656 sales and Victoria which had 172,902 sales.
The eastern states also accounted for the largest value of sales, with NSW recording $215.5 billion, Victoria $142.0 billion and Queensland $137.6 billion.
