Why “20-minute cities” are set for a property boom
The pandemic has changed the way we live and work. It’s also changed housing markets – prompting the rise of "20-minute cities".
It likely comes as no surprise that people want to feel more connected and closer to their communities than ever before. After many Australians have spent literally months cooped up in lockdowns, enjoying both your home and your neighbourhood has never been more important.
Real estate investing expert Emma Allen, director of Active Property Investing, says the pandemic has had a huge impact on property markets.
"One big change we’re seeing is the fact that people value different things about their homes. They now want to be closer and more connected to their communities, which has prompted the trend of '20-minute cities'," Allen said.
"The 20-minute city is a concept that is emerging in metropolitan planning, especially in growth corridors.
"With the pandemic changing the way we live, people are redefining what matters to them most. Living in close proximity to the things they really care about – like work, healthcare, shops, restaurants, cafes, parks and beaches – now really matters."
What is a 20-minute city?
A 20-minute city is a location that encompasses space for leisure, recreation, work, amenities and services, so local residents don’t need to commute or travel far to get where they want and need to go.
"Put simply, being within 20 minutes' drive of everything they value bodes well for ordinary life, as well lockdown-type restrictions," Allen said.
An example of a 20-minute city is Byron Bay.
"In built-up coastal suburbs, a 20-minute city with everything in close proximity might fetch a premium price for properties," she said. "[Buyers] might be able to capture infill-sites or properties within existing suburbs to reap the benefit of a 20-minute city like this, that is already 'established'."
Now, if you bought property in Byron 10 years ago, then you’ve made a tidy profit – the median house price has surged a massive 70% in the last 12 months.
This means locations like Byron Bay have fallen out of reach price-wise for most buyers.
If you want to buy a home or invest in property and take advantage of this 20-minute trend, then, where else in Australia can you find a more affordable prospect?
How to find the next Byron Bay (before property prices double)
Nerida Conisbee, chief economist at Ray White, says it is possible to get in on the ground floor at a beachside location, which she expects will "see some major Byron Bay-style growth".
"In Byron Bay… the median house price is now more than $2.5 million," she said.
"It has beautiful beaches, low-rise development and a laid-back retail core. There is a lot to like about Byron Bay but many features certainly aren’t unique."
To identify the next Byron Bays across Australia, Conisbee said she focused on homes that meet the following criteria:
- Located by the beach
- NOT within easy commuting distance to a capital city
- Priced under $1 million
- Achieving 20%+ price growth already
- Minimum 5% rental return
"Long-term growth has to be solid, with annual growth of more than 5% per annum over [the last] 10 years," she added.
Here are Consibee’s top picks:
"Although prices have increased a lot, the median is still under $750,000 and… it has lots of lovely beaches," Conisbee said. "It also has regular farmers' markets and what looks to be a lively main street, which makes it already very Byron Bay-like without too many adjustments required."
Palm Cove, Queensland
"Palm Cove is already very lovely but surprisingly is still relatively affordable with a median price under $800,000," Conisbee said. "It has a nice beach, a lot of great restaurants, and you can take your dog anywhere, even on the beach… And being so far north, it does provide nicer weather when southern states are cold."
Cape Woolamai, Victoria
Located on the south-eastern tip of Phillip Island in Victoria, this area is a little out of commuting distance from Melbourne. But it has a popular surf beach and a nice main street, Conisbee said – and it's still relatively affordable, with a median of around $600,000.
Dunsborough, Western Australia
Dunsborough is located around 250km south of Perth and is close to Busselton. "The median is $670,000 with prices increasing by 10% over the past 12 months,” she said. "It has lots of nice beaches, shops and restaurants. As an added bonus, it’s close to Margaret River wineries."
Robe, South Australia
"Robe is relatively affordable with a median of $435,000 but has seen almost 20% price growth over the past 12 months. It has nice beaches and an historic town centre and sounds like a pretty relaxed place to visit," Conisbee said.
Affordability is the key driver in this location. "Penguin is on the north-west coast of Tasmania and is picturesque, has a beach and is still pretty affordable with a median under $450,000."
Once you decide where you want to buy, you need to finance the purchase – compare the latest home loan offers now.