Dianne Gardiner, CEO and social researcher at Bastion Insights.
On March 12, 2020, the World Health Organisation officially declared COVID-19 a pandemic. On March 13 Australia’s Grand Prix was cancelled, and from there we saw the pandemic impact our lives in so many ways: shopping, schooling, entertainment, socialising, exercising, travel, and our work life.
One year on, what are the long lived impacts of the pandemic that have changed our lives forever and which parts of life will revert to pre-COVID ‘normal’? Like many of the changes we endured over the last year, no one really knows the answer to how long or sustained some of those changes will be, but there are some clues to how COVID may have long lasting impacts.
The pandemic has highlighted the ability and benefits of flexible working arrangements with working from home becoming the norm last year. For many workers, especially those in Melbourne, for almost 12 months they have experienced working from home. In other parts of Australia, workers started returning to offices a lot earlier. But we also know from our research there are many who have not and there are many who do not want to. Our recently released Hybrid working study showed that around a third of workers would prefer to continue to work from home, while one third would prefer a hybrid approach (part
home/part office).
The move to more flexible working arrangements has had flow on effects:
- Where people choose to live
- Where and how they spend their money (during the working week)
- Their transportation needs
- Their housing needs (the need for dedicated home office space)
- The impact on commercial real estate, the make-up of our cities, suburbs and regional areas
ABS internal migration data has shown in the September 2020 quarter there was a net loss of 11,200 people from Australia’s greater capital cities through internal migration. This was a larger net loss than in the previous quarter (-11,000) and the September 2019 quarter (-5,600). But the impact is only really in Melbourne and Sydney (with each of Sydney and Melbourne loosing over 7,000 people each). Brisbane bucked the trend with a net gain in both Brisbane and regional Queensland.
It is also important to note who is moving out of capital cities. The latest ABS data shows a substantial increase in those aged 25-44 making the move to regional Australia increasing by 270% from September quarter 2019 to September 2020.
This is supported by Bastion Insights’ Adapting to the New Normal survey research data which showed nationally 16% of people said they would be likely/very likely a move to the regions, with Victorians topping the list at almost 1 in 4 (23%) 2 . But those looking for work are less likely to move regionally (13% looking for work vs 18% working), which tends to suggest workers feel they will be able to work remotely and avoid the commute. The highest demographic groups looking to move regionally are those 30-39 years (21%). But those looking for work are less likely to move regionally (13% looking for work vs 18%). Is this shift a temporary result of the pandemic or is it a longer term trend yet to be seen. If it is longer term, how will this impact the demand for services and amenities in the regions.
Further evidence supporting a potential structural shift is CoreLogic’s latest housing value data 3 which shows regional areas of Australia have seen housing values rise at more than four times the pace of capital city values over the past twelve months. And regional prices continue to grow faster than metropolitan values.
CoreLogic Housing Market update – February 2021:
The combination of housing and population data highlights that in some parts of the country COVID-19 has spurred an increase in movement to regional Australia (especially in Melbourne, Sydney and Brisbane).
While it remains unknown how many employers will revert back to old ways of working and require their employees to ‘show up’ at the office, there is no doubt flexible working arrangements have become more mainstream, and some employees will either demand more flexible arrangements or switch jobs to one that provides it. Individual job options will be less focussed on the location and more the skill set. And with this shift, the practicalities of living outside of our two biggest capital cities becomes so much more feasible. Housing affordability also factors into the decision. Even before COVID-19 affordability was a driving factor of departure from the cities. Now people are seeking larger homes, with more space to work flexibly.
And as people move from capital cities to regional areas, where and how they spend their time and money changes. No longer are people spending time and money daily commuting and spending $20 a day on lunch and coffees. That’s not to say you can’t get a great coffee when you need one.
And instead of heading out to dinner, they might opt for a weekend dinner party at home.
In Victoria, Providoor was a new service that arose out of the pandemic that gives all Victorians access to Melbourne fine dining restaurants. I live over 80km from Melbourne, and I can now order dinner from some of my favourite restaurants, and it arrives ready for me to heat and serve to my guests. While it is not the same as going to the restaurant, it beats driving 80 km, and provides a high-end alternative to delivery that I never had access to (Uber eats, Deliveroo or Menulog aren’t usually accessible in regional areas).
It doesn’t matter that people no longer live within 10 kms of Chadstone, as they have a world of shopping at their fingertips.
They can still get the bulk of their groceries delivered to home. But the fun of going to farmers markets on the weekend close to the source is like no other.
While no one has a crystal ball at what aspects of life will remain forever changed post COVID-19, there are a number of factors that suggest growth in regional areas in our three biggest states is a good bet. So, have you factored in how does this change how you market, attract and keep your customers?