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Property

Australia's suburban home prices soar as city dwellers seek space

Telecommuting in pandemic lets families pick bigger houses near nature

Beachfront property in Hyams Beach: Demand for lifestyle properties has grown with the increased prevalence of remote work since the pandemic.   © Reuters

SYDNEY -- Australia's city dwellers are fleeing to suburbs and rural towns that offer easier access to nature, a trend accelerated by the pandemic-induced shift to teleworking.

A four-bedroom house new on the market in Killcare, a roughly 90-minute drive from Sydney, has garnered strong interest despite an asking price of 1.7 million Australian dollars ($1.31 million). Its charms include a view of the beach from higher ground.

"Now that we know we can work from home, we're looking for a house with a good view within walking distance of a beach," said a 50-something officer at an information technology company who toured the property with her husband.

Local home prices have climbed 35% on an influx of buyers, chiefly those leaving Sydney for "value and lifestyle," said Cathy Baker, principal of real estate company Belle Property Killcare.

Rural and suburban housing prices are rising faster than those in cities. Prices increased 3% nationally in 2020, as eight cities including Sydney and Melbourne gained 2% while the rest of Australia jumped 6.9%, according to housing information provider CoreLogic.

"Sold" signs on real estate listings are a common sight in Killcare. (Photo by Fumi Matsumoto)

Upturns in urban areas, which attract immigrants, typically outpace increases elsewhere. But 2020 reversed the trend "as remote working opportunities became more prevalent and demand for lifestyle properties and lower density housing options became more popular," CoreLogic said.

Locations one to two hours from Sydney and other big cities are particularly popular.

Australians are known for a strong focus on their living environment. Houses built in the 12 months through June 2020 boasted the largest average size worldwide at 235.8 sq. meters, up 2.9% on the year and bigger than the 233.1 sq. meters in the U.S. for 2019, securities firm CommSec says. Even apartments down under offer an average space of 136.8 sq. meters.

With family members staying home together to ride out the coronavirus pandemic, buyers may seek even more spacious dwellings in the future, helping keep the market strong. Ben Udy of U.K. research firm Capital Economics predicts home prices will "rise by 10%" during 2021.

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