PROPERTY

Coronavirus could spark a tree-change as more of us work from home

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The COVID-19 pandemic has sparked a new wave of inquiries from people interested in moving from capital cities to regional areas, according to real estate agents.

The pandemic has meant a lot of people experienced working from home virtually full time for the first time and many found it beneficial. More than 80% of people say the experience has had a positive impact on the way they think about work-life flexibility and how they manage it, according to a survey by the NBN. Additionally, and critically, 67% say they expect to work from home more after this is all over.

If working from home does become the new norm for many, it opens up the areas where people can live and still hold down a job. It means you might even be able to consider buying a real cheapie for $100,000 or less.

tree change covid19

Our desire to live close to work is a major reason our cities are so crowded and house prices are so expensive - indeed, too expensive for lots of us.

COVID-19 has shifted the way people think about where they live and work. If you can live virtually anywhere and still hold down a job, there are places in every state where you can buy a decent home for around $100,000.

Contrast that with the median prices in the major cities: Sydney $885,159, Melbourne $686,798, Brisbane $508,386, Adelaide $441,184, Perth $443,669 and Hobart $486,056 as at May 31, according to data from CoreLogic.

In Australia's first heritage listed city, Broken Hill, there are homes for around $100,000. A small home on a 478sqm block in Chapple Lane was on the market for $99,000 at the time of writing, according to realestate.com.au. Recent sales included a three-bedroom home in Patton Street for $84,000 and another three-bedder in Williams Street for $95,000.

Broken Hill is a long way from Sydney - a 13-hour drive and a four-hour plane trip - so it would best suit those who didn't have to visit the office too often. But even if you did have to factor in some commuting charges, consider that your mortgage repayments would be tiny compared with the mortgage on a median house price in Sydney.

If, for example you borrowed $80,000 on a 30-year principal and interest mortgage at 2.65%, your monthly repayments would be $322. If you borrowed $708,127 (80% of the median Sydney price) on the same mortgage terms your repayments would be $2854.

If you prefer to use your cheapie home as an investment, the median rental for a two-bedroom home in Broken Hill was $220 at the end of May, according to realestate.com.au, equating to a jaw-dropping gross return of 11.44% a year. Keep in mind, however, that Broken Hill is labelled a low- demand market.

If you want to be closer to Sydney, there are two-bedroom units in Orange, a regional centre with a strong wine and food culture and a 3.5-hour drive from Sydney, for around $100,000 and several homes in the $150,000 to $200,000 range.

In Victoria, you can buy a "cute cottage" in Rainbow, a small rural town known as the gateway to the Mallee, for $95,000. It is a 4.5 hour drive from Melbourne. The two-bedroom home in Railway Street is rented for $160 a week, providing an investor with a gross return of 8.8%.

Rockhampton, a city in central Queensland known for its beef production, boasts properties around the $100,000, especially in suburbs such as Mount Morgan, Walterhall, Depot Hill and Allenstown. In Rockhampton city there is a four-bedder in Campbell Street for $100,000 at the time of writing. While it's a seven-hour drive from Brisbane, the area is well serviced by rail
and air.

In Port Pirie, a seaport 2.5 hours' drive north-west of Adelaide, you can buy a two-bedroom home in Jellicoe Street for $100,000 and there have been recent sales around that mark. The median weekly rental is $183 for a two-bedder, according o realestate.com.au, giving a gross
return of 9.5%.

Queenstown, the largest town in Tasmania's west and once the world's richest mining town, boasts some cheapies including a home in Denison Street for $99,900. Indeed, the median price in the area is a mere $91,500, according to realestate.com.au.

In the WA town of Merredin, three hours' drive from Perth, there have been several recent sales at under $100,000, not surprising given the median house price is only $82,500. Available at the time of writing, a three-bedroom home in Endersbee Street is for sale at $99,000.

We're cutting through the confusion to help you manage your money during the coronavirus outbreak. Click here for more on how COVID-19 could affect your job, budget, super and investments.

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Money's founding editor Pam Walkley stepped down in early 2015 after more than 15 years at the helm. Before that she was at the Australian Financial Review for 11 years, holding several key roles including news editor, chief of staff and property editor. Pam is now a senior writer for Money.
Comments
Leonard Johnstone
July 25, 2020 3.39pm

Very happy to see Pam back writing on real estate.

I follow her views.

Is Pam able to updated us on the AReits section and give us her ideas going forward.

Regards

Len

Darren Snyder
July 27, 2020 1.03pm

Hi Len,

Thanks for your feedback.

Pam has continued writing her regular real estate column in every print issue since Rainmaker Group purchased the magazine in March 2019.

She also wrote a column on A-REITs in the June print issue. It's a sector the magazine follows closely and I'm sure we'll be writing about it again in the not too distant future.

We don't publish every print article online, but I can reassure you that Pam is continuing to write for the magazine.

Thanks for your continued support.

- Darren Snyder

Managing editor

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