Remember the great regional migration? During 2020 and 2021, tens of thousands of Australians left capital cities for regional towns, driven by remote work, lockdown fatigue, and suddenly affordable regional property. Headlines declared the death of the CBD. Property prices in Byron Bay doubled. Agents in Ballarat couldn’t keep up with enquiries.

Three years on, we have enough data to answer the question that matters: how much of that migration was permanent, and how much was a pandemic-era blip?

The answer, based on the latest ABS internal migration data released in late 2025, is somewhere in between. The regional migration wave was real and significant, but it’s partially reversed - and the pattern of who stayed and who returned tells us a lot about where regional property markets are heading.

The Data

During the 2020-21 financial year, Australia’s capital cities experienced a net internal migration loss of approximately 66,000 people to regional areas. That was the highest figure in decades and represented a genuine structural shift from the usual pattern, which sees capital cities gain population from regional areas.

By 2022-23, the net regional gain had shrunk to about 24,000. In 2023-24, it was approximately 18,000. The latest partial data for 2024-25 suggests it’s stabilising at around 15,000-20,000 per year.

So the flood has become a steady stream. Regional Australia is still gaining net population from capital cities, but at roughly a quarter of the pandemic peak rate.

Who Went Back

The return-to-city flow has been strongest among younger professionals aged 25-35 without children. This group was the most mobile during the pandemic - many were renters who moved to regional areas opportunistically when their employers went fully remote. As employers mandated office returns (typically 2-3 days per week), the calculus changed.

A marketing professional renting in Daylesford who needs to be in Melbourne three days a week faces a five-hour daily round trip. That’s not sustainable. Many in this group moved back to inner suburbs, accepting smaller apartments in exchange for shorter commutes.

The data also shows that people who moved to regions within reasonable commuting distance of a capital city (roughly 60-90 minutes by car or train) were more likely to stay than those who moved further out. Geelong’s population gains from Melbourne have been more durable than, say, Bendigo’s. The Central Coast has retained more Sydney migrants than the Mid-North Coast.

This makes intuitive sense. Hybrid work is real and persistent, but it still requires some office time for most people. Living within commutable distance makes hybrid work feasible long-term. Living three hours away doesn’t.

Who Stayed

Three demographic groups have shown much stickier regional migration.

Families with school-age children. Once kids are enrolled in a regional school and making friends, the switching costs of moving back are enormous. Parents who relocated during the pandemic and put children into local schools are largely staying put. The kids are settled. The lifestyle is good. The mortgage is manageable. There’s no compelling reason to return to a $1.5 million mortgage in Melbourne’s inner east.

Pre-retirees and early retirees (55-70). This group used the pandemic as a trigger for a move they’d been contemplating for years. They sold the city home, bought in a regional town, and aren’t going back. For them, the pandemic wasn’t the reason - it was the permission.

Remote-first workers in tech and creative industries. A subset of workers in industries that have gone permanently remote have stayed regional. Software developers, designers, writers, and consultants who work for companies with no physical office have no reason to return. This group is small in absolute numbers but concentrated in specific lifestyle regions, which has outsized effects on local property markets in places like Byron Bay, the Sunshine Coast hinterland, and the Mornington Peninsula.

What It Means for Property

The property implications vary dramatically by region.

Lifestyle regions within commuting distance (Geelong, Central Coast, Wollongong, Sunshine Coast) have seen their pandemic price gains largely hold. Demand remains elevated because they offer a genuine alternative to capital city living for hybrid workers. New infrastructure investments - particularly rail upgrades and freeway improvements - reinforce their attractiveness.

Remote lifestyle regions (Byron Bay, Far North Queensland, Margaret River) have seen more price volatility. Prices ran hard during 2020-2022, corrected somewhat during 2023-2024 as some buyers returned to cities, and have now stabilised. These markets are smaller and more sentiment-driven. A handful of listings hitting the market simultaneously can shift the vibe quickly.

Agricultural and industrial regional towns that lack lifestyle appeal or remote work infrastructure have seen the smallest and least durable migration gains. Towns where the primary employment is in agriculture, mining, or manufacturing didn’t attract many remote workers, and the ones they did attract were often renters who left when conditions changed.

The Rental Crisis Continues

One lasting legacy of the regional migration wave is the rental market. Regional vacancy rates remain extremely tight across most of Australia. SQM Research data shows vacancy rates below 1.5% in most regional centres as of early 2026, with many towns below 1%.

The reason is straightforward. The pandemic migrants who stayed are occupying housing stock that was previously available. Regional areas didn’t build enough new housing to absorb the increased population, and construction timelines in regional towns are typically longer than in capital cities due to trade shortages and supply chain challenges.

This is putting severe pressure on long-term regional residents, particularly lower-income renters who now compete with higher-income tree-changers for a limited pool of rental properties. It’s a genuine affordability crisis that hasn’t received enough policy attention.

Looking Ahead

The regional migration story isn’t over - it’s just matured. The pandemic-era goldrush mentality has faded. What remains is a structural shift toward regional living for specific demographics, supported by hybrid work arrangements and improved connectivity.

For property investors, the lesson is selectivity. Not every regional market benefited equally from the migration wave, and not every market will sustain those gains. Focus on regions with genuine economic diversity, good transport links to a major city, and the infrastructure to support continued population growth.

The regions that invested in liveability - decent healthcare, reliable internet, cultural amenities, and good schools - are the ones keeping their new residents. And those are the markets with the most durable long-term value growth.