By the thinkBIG Team
The ‘sea change’ or ‘tree change’ phenomenon is sweeping Australia as people move out of big cities nationwide for more relaxed and affordable living in coastal or country towns.
Many Australians are seeking to escape sky-high property prices and cramped living. Others are chasing a greater sense of community or simply a place to get away from the smoke and pollution.
A big factor driving sea change – moving to the coast - and tree change – moving to the country - is baby boomers who are escaping city congestion, stress and long working hours for a more peaceful life.
Expensive homes are being sold and cashed-up boomers are moving away, especially if their children have moved out. Some are moving out part-time while still commuting to jobs in the cities. Others are leaving their jobs and homes for good for a simpler life.
Each year, approximately 66,000 people move to the coast and another 25,000 to 30,000 shift to a country town located within three hours of a city, according to KPMG demographer Bernard Salt. With more baby boomers due to retire in coming years, that number will rise even more.
It’s not just the boomers who are shifting. Younger families are seeking to avoid the mortgage trap and are shifting to seaside or country towns where they can buy the home they want on a bigger block of land.
The sea is still the most popular place to go. Over the year to June 2006, seven of the ten fastest growing towns on the Australian continent were located on the Queensland coast, with the Gold Coast reasserting itself as Australia’s fastest growing place, according to a 2007 population report by KPMG.
Other towns in the top ten included Hervey Bay in Queensland, Western Australia’s Bunbury and Mandurah as well as the pretty tree change town of Mt Barker in South Australia.
If you’re considering a sea change, now may be the time to move before property values rise too high. But you might need to look away from popular seaside towns for a house. As sea change becomes entrenched, so too do higher property values. So don’t head straight for the Gold Coast or Noosa, but keep your mind and map open to different towns.
Be careful not to buy a home in a remote town or in the middle of the desert as you may cut yourself off from future capital gains. Try to buy a home in a location where other people would want to live and that will ensure your property gains in value. The seaside is always good for this and proximity to a capital city is also important.
Once you pinpoint a few towns, research house values by checking property pages in local newspapers and making contact with real estate agents. Check prices on recent house sales in the town to make sure you don’t pay too much for your home.
It’s also important to ask the local council about plans for the area. The council can tell you whether roads, shops or other infrastructure are being planned or built in the town. If so, it can make life much easier for you and future residents. New roads, bridges, and new or upgraded rail connections all can boost the appeal of a location by making it more accessible and therefore boost property values. If you have children, check what government services such as schools, health care and public transport are available.
Once you choose a town, get to know the area well to see if you really like it. You could try renting first to check out the social scene. Get to know your prospective neighbours and the local community to find out what the town is about.
If you don’t want to make an immediate move, you could start with a vacation home, visiting a few weeks each year. Weekend trips will also help you to get to know the area. Living in the town three to four days a week while commuting to work in the city is another option. Indeed, it’s important to visit outside the holiday season to discover the real character of the area.
If you’ve got time on your side, buying now and renting the home out until you’re ready to move in gives you flexibility. You can reap a good source of income while securing a home at today’s prices. Many tree or sea change towns are experiencing strong growth so the sooner you get into the market, the cheaper property prices will be.
But whatever option you decide on, you’ll need funding if you want to keep your city home. Some lenders will allow you to borrow against the equity existing equity in your home. Another option is to extend the credit limit on your existing mortgage or redraw funds, which may mean you don’t need to apply for a new home loan.
If you decide to sell up your city home, you may find you’ve got a decent sum left over once your pay for your home and stamp duty. That will give you additional flexibility to enjoy your new life outside of the big city.
