Episode Details

There is no doubt that our property markets are in a broad-based boom, with almost all segments, other than the inner-city apartment market showing strong property price growth.

And the media is having a field day whipping up a frenzy of emotions with headlines causing some buyers to worry that the housing market is running away from them.

In fact, FOMO (fear of missing out) seems to be a common theme around Australia's property markets.

But the general media and certain commentators on social media are worrying home buyers and investors by speculating that interest rates are about to rise or that unemployment will escalate to 8% when JobKeeper ends, or that everybody is moving to the country and city property values will be affected.

So in today's show, I want to bust some property myths in two segments.

You probably know that I host a regular weekly Property Insiders video on my YouTube channel where Dr. Andrew Wilson gives sensible, down to earth commentary about what's happening in the property market, and the audio recording of last week's video will be the main feature of today's show but first I'd like to bust some of the media myths about regional Australia's property markets, who's moving there and whether you should consider investing in regional Australia.

The Regional Australia Myth

I'd like to start by discussing the myth being promoted in the media that investing in regional Australia is a great idea.

First, that's a silly comment – there are so many different regional markets, as you know I don't suggest investing in the Sydney property market or the Brisbane property market because even within capital cities there are many different markets divided by geography, price point, and type of dwelling.

So, therefore, just suggesting investing in regional Australia makes little sense.

Then there's the argument that some put in the media that this particular town in regional Australia has performed better than the Sydney property market.

Again, that's a silly comparison, because the regional town may have 5, 10- 20,000 people in it and Sydney has 5 million people in it.

A better comparison would be the long-term performance of a particular regional town against a high-performing capital city suburb.

When it comes to investing, you shouldn't be considering how you want to live, you should be investing in numbers, stats, demographics, and evidence and that's what I'm going to share with you in a moment.

What about migrants?

We know that prior to the Covid pandemic and Australia shutting its borders, the population was growing faster than almost every other developed country and more than half our population growth of almost 400,000 people each year was coming from immigration.

Property commentator Michael Matusik wrote a recent blog discussing the myths about regional population growth.

Now there is no doubt that there is a small cohort of people who now want to live in regional towns within commuting distance of big capital cities because they have found they can work from home either part-time or full time, but Michael Matusik asks, "Is this what has been driving our regional property markets?"

Matusik suggests that the real reason why the regions have seen an increase in net internal migration over the last 12 months is because people who would normally have moved from the regions to the capital cities are (for now) staying put.

And the ABS statistics suggest that this is true.

Net internal migration to the regions was 36,500 last year, which was up 14,000 or 62% on the year before.

Now that sounds impressive, doesn't it?

But you know how you can make numbers lie and twist them to make your point?

You see… net migration is worked out by comparing those that move into an area against those that leave the same place during the same time frame.

Firstly,