The option of drawing down capital from a highly valued property in the inner city and moving out to the bush has always been an appealing prospect for some retirees, and the idea is undergoing a resurgence in the current financial climate.
CoreLogic head of research Tim Lawless has found that although the pace of capital gains is generally easing as the Australian property market cools, a variety of factors have contributed to renewed demand for properties outside the cities.
A large part of it must be attributable to the ‘wealth effect’, where homeowners (particularly those in Sydney and Melbourne) have seen a substantial wealth boost via their property holdings.
Couple this with a large cohort of baby boomers seeking out holiday homes or relocation options as they shift into retirement age, and the demand picture becomes more pronounced.
Affordability is always an important choice. And it’s definitely one of Mr Lawless’ various factors in retirees shifting away from the city, with analysis showing that hinterland properties tend to be priced lower than those in coastal or big city areas.
“The hinterland areas of the NSW Southern Highlands and the Macedon Ranges in Victoria show the most significant value premium,” Mr Lawless explained.
“The median dwelling value across the Southern Highlands of NSW is just over $735,000, while the Macedon Ranges have a typical dwelling value of roughly $700,000 – not cheap, but both regions show a lower median dwelling value relative to their respective capital cities.”
At the other end of the spectrum is Tasmania’s Central Highlands, where the typical house is worth just over $200,000.
“The regions to see the strongest growth over the past five years are generally very different to the best performers over the past 12 months,” Mr Lawless said.
“The hinterland areas peripheral to Sydney have dominated the capital gain stakes over the past five years; however, growth in those areas has slowed substantially over the past 12 months.”
Have you considered a tree-change or sea-change on retirement? Or have you already made your move? What was your experience of adapting to the change?