The flight to the suburbs and regions beyond is picking up pace as we adjust to living and working during a pandemic. Gradual it may be, but the signs are there: flexible ‘hub and spoke’ workplaces are flavour of the month in metropolitan areas, neighbourhood retail centres continue to hold their ground driven by consumers preferring to shop closer to home while regional property agents in are reporting “ferocious demand” from capital city-based investors and buyers wanting out of densely populated surrounds.
This week it emerged that ‘white collar nomads’ are targeting desirable coastal pockets in far northern NSW. The demographic has driven up home prices to the point that suburbs between Tweed Heads and East Ballina are now home to the most expensive property outside the state’s major cities.
Data from realestate.com.au shows the Tweed-Richmond region the most popular for real estate searches, and homes in the idyllic hamlet of Bangalow, a rural village close to Byron Bay, the second-most viewed in NSW since the pandemic began. Bangalow’s surrounding areas of Byron Bay, East Ballina, Casuarina, Kingscliff, Lennox Head, Tweed Heads, Bogangar and Terranora also rated among the top 10 most viewed NSW regions between April and July this year.
Safe havens
Property buyers had clearly shifted their focus to regional areas and northern NSW since lockdowns, social restrictions and working from home had affected their city lifestyles. The appeal of coastal havens was their laid-back lifestyles and pleasant beachside locations where working remotely could be simple and supported by infrastructure in nearby larger towns.
This latest data follows the COVID-19 V Australian Property Report by national property research group Ripehouse Advisory which found the pandemic had sparked a greater interest in perceived “safer” suburbs.
In April, Ripehouse identified 55 suburbs Australia-wide that home seekers viewed as ‘safe havens’ thanks to COVID-19. In Melbourne, the Ripehouse report forecast the metropolitan area’s population to drop in the next few years driven by COVID-inspired sea and tree-changers, even though the inner city suburbs of Carlton, Melbourne, North Melbourne, South Yarra and Southbank would remain popular. Outside metropolitan Melbourne, the Northern Grampians was looking to become one of the most popular alternatives, the region’s population growth tipped to rise almost two per cent compared to the 2.5 per cent decline that was forecast pre-COVID.
CEO of Ripehouse Advisory, Jacob Field said buyers would continue targeting areas two to three hours outside of key metropolitan CBDs as they saw them safer places to live and raise families as well as more pleasant locations to WFH. “We are seeing a golden circle emerge around our key metro cities,” Mr Field said.
In Queensland, Urban design and advisory giant Urbis has seen sales skyrocket this year across four of its large-scale community projects located in the state’s popular south-east. Far from being shunned by COVID-panicked consumers, lot sales more than quadrupled from January to June across the lifestyle-driven developments, many thanks to government stimulus packages that made the dream of a new home in a well-planned, infrastructure-rich suburban community an affordable possibility.
In Sydney, Ripehouse Advisory listed suburbs deemed most desirable since the pandemic based on property searches as Avalon, North Curl Curl, Bayview and Wheeler Heights on the northern beaches; the lower north shore suburb of Wollstonecraft; the gentrified inner city and inner western areas Waterloo, Petersham, Dulwich Hill and Croydon Park and Beaconsfield near Mascot, located under 10 minutes by train from the CBD on one side and Sydney Airport on the other.
Hub and spoke
Mascot is among those suburbs to have seen a flurry of commercial and infrastructure development leaving it well-placed to cater for suburban workforces. CBRE recently launched one of its newest office complexes, Connex, in Mascot, a ‘hub and spoke’ style development of the type garnering favour with employers and workers as well as investors. Hub and spoke developments offer a middle ground between a sole centralised office and WFH, instead allowing a business to be headquartered in a ‘hub’ staffed by key employees, with the remaining workforce spread out geographically across a number of ‘spoke’ offices. As the model allows people to work closer to home it has naturally been accelerated by COVID-19, to the benefit of funds managers such as city-fringe office specialist Growthpoint Properties Australia. The heavyweight controls a portfolio of east coast metropolitan office towers and warehouses ideal for the many businesses now seeking to establish hub and spoke-style premises through leasing smaller, more cost-effective premises outside of capital city CBDs.
CBRE Office Leasing Director Brendan Shipp said developments such as Connex were catering to the hub and spoke market which was evolving due to employers and employees grappling with both the shortfalls and benefits of remote working. As one of the latest urban office developments, Connex is top-to-bottom smart building technology, offering contactless entry, thermal screening, UV sanitisation and 100 per cent fresh air.
Typical of those suburbs gaining favour with residents as well as businesses, Mascot’s location and affordability is also key to its appeal. Located only six minutes by train from the Sydney CBD by train, leases are generally less than half those in the city, the Connex development being offered at rentals of $560-$650/sqm net. Mascot retains the atmosphere of a long-established suburban area and gentrification continues to take place. The WestConnex M8 which opened in July also provided a huge boost to the suburb as it granted accessibility through to the M5 East.
“Given the desire for flexible working, new developments which offer cost effective rentals and smart, environmentally friendly office solutions will be highly sought after,” Mr Shipp said.
“This is driving interest in hub and spoke, metropolitan office locations and new projects such as Connex, which cater to a new style of working.”
Spending styles also indicate we’re not leaving our suburban bases any time soon: suburban and regional supermarkets and centres anchored by major supermakets are among the best performers in a besieged retail market – borne out by the appetite for smaller investment grade stock. Neighbourhood centres for instance made up a third of total retail transactions in the first six months of 2020, compared to 16 per cent over the same period last year.