New data shows that a percentage of homebuyers are now looking for interstates, but some places are getting more interest than others.
The percentage of property searchers looking to buy an interstate on realestate.com.au has steadily increased over the last few years.
Across Australia, 18% of search purchases will be for interstate properties in 2022, up from 16% just one year ago.
Interstate demand saw the biggest surge from buyers in New South Wales, with just under a quarter of searches for properties in other states.
Buyers in New South Wales are most likely to look interstate in Australia, with the exception of territories with large mobile populations.
Both purchasing power and affordability are part of the story here.
People in New South Wales are most likely to search for new homes interstate. Photo: Getty
Greater Sydney is Australia’s most expensive capital city. There, the median price for a unit is $760,000, higher than the median price for homes in Adelaide, Perth, Hobart and Darwin.
Property prices are falling, but remain 21% higher than pre-pandemic levels.
In addition, interest rate hikes last year reduced the average amount a buyer could borrow by about 25%.
For Sydney residents who are not priced out of their home market but want to climb the real estate ladder, the interstate could offer an opportunity.
In addition, a higher median price means that those who already own in Greater Sydney are likely to have greater interstate purchasing power through shares that can be bought or sold or used.
Those who own a home in Sydney enjoy greater purchasing power in other states.Photo: Getty
For homeowners in more affordable states, this is not the case.
Sydney, Melbourne and Brisbane-based property seekers are looking for properties in various states, but properties based in Darwin and Adelaide (the two most affordable cities) are priced higher than other states more likely to become
The top 10 interstate suburbs searched by Northern Territory-based buyers were all in South Australia. Similarly, for SA, 9 of the top 10 interstate suburbs searched were in NT.
Overall, interstate buyers were most likely to search in Queensland, accounting for 34% of all interstate searches in 2022. This is followed by Victoria and New South Wales, each with 17% share.
What should be noted is the mismatch between where buyers are searching and where they are looking.
For example, 38% of interstate searches came from NSW searches, more than double the number of searches the state attracted.
In contrast, Queensland, Western Australia, Tasmania, and the Northern Territory generated more than twice as many shares of interstate buying searches as they generated.
While the number of interstate purchases is not yet significant at the statewide level, certain markets could be significantly impacted.
Home buyers from the southern states are turning to Queensland.Photo: Getty
This was seen during the pandemic when demand for community housing surged among former city dwellers, sending prices skyrocketing and making them less affordable for locals in these areas.
The same challenges exist for interstate markets.
Take Queensland for example. A third of all purchase searches are from interstates, especially NSW and Victoria.
Over 40% of homeowners own their property outright with no mortgage.
The increased purchasing power gained by owning property in a more expensive market could make it easier to bid in more affordable areas, driving up prices in the process.