A real estate expert is warning city buyers not all country towns are the same.
Subscribe now for unlimited access.
or signup to continue reading
Those fleeing the cities are being advised to do their research before making the move or risk end up being stranded.
Some of those making the move are even buying country homes sight unseen, relying on online listings, agents have advised.
Buyers' agent Kate Hill from Adviseable Property said statistics showing regional property prices outpacing growth in capital cities may "trip up some novice property investors".
House prices in regional Australia have risen by 13 per cent over the past year, doubling the also healthy demand in the capitals.
Ms Hill said the price results may send "the wrong signal" to first-time property investors that every regional location is "a sure-fire investment winner".
She said her business had been investing in major regional locations for years but had also been giving some other rural and remote locations "a wide berth".
The availability of housing stock within the key commute distance of the big cities has become an issue as well.
Agents report more city people are willing now to travel even further, and are buying up homes in even smaller towns.
"Clearly, pent up demand and a number of other factors, including record low interest rates, are motivating more investors to buy into markets near and far, but the fundamentals must stack up over the long-term as a strategic investment location," Ms Hill said.
Ms Hill said only time would tell whether the trend of people moving away from cities to regional areas would become permanent.
"Some investors might be considering these short-term migration patterns, as well as the current robust price growth, as justification for buying into regional areas," she said.
"But, in a year or two, they may be left with an investment property in a location where many of the new residents have already reversed their decision-making and gone back to the city.
"Plus, they may have bought into an area where the local economy was always reliant on one-industry, such as tourism or mining, which is not akin to significant nor sustainable capital growth over the years ahead."
IN OTHER NEWS:
Ms Hill said some major Victorian regional locations such as Ballarat, Bendigo and Geelong had strong property markets long before the pandemic, whereas others had been struggling for a years due to their remote locations and one-industry economies.
These factors are why novice property investors must always consider the investment fundamentals of a location before deciding to buy real estate there, she said.
"Some of the key fundamentals include having a diverse and vibrant local economy, solid jobs growth, and a variety of industries such as health, construction, retail, and education to adequately service its local population," she said.
"In regional areas, the local economy must also be self-sufficient, which means local most residents should live and work there as well as spend their money there."
Ms Hill said anyone considering buying an investment property must complete thorough due diligence on the future prospects of a place - rather than making decisions on potentially short-term fluctuations.
"By purchasing in an inferior regional or remote location, some investors might find out that the so-called 'cheap' buy-in price becomes a very expensive 'experience fee' with the benefit of hindsight."
Also, CoreLogic this week released further data showing rent values across the combined regional markets had risen almost three times as much as the capital city markets over the year.
The CoreLogic hedonic rental value index, which tracks the combined value of rent estimates for all properties, increased 9.6 per cent in the year to April, compared with 3.3pc in capital cities.