The race to the regions is no short-term trend: report

Sydneysiders continue to lead the great escape to the country, while regional NSW overtakes Queensland as the most popular new home for tree changers.

The harbour city accounted for 80 per cent of all migration away from the capital cities in the year to September, compared to 60 per cent the year before, regional population data shows.

"It suggests the bigger our cities get, the stronger the draw to our wonderful regions becomes,” Regional Australia Institute chief executive Liz Ritchie said.

The quarterly Regional Movers Index, a collaboration between the think tank and Commonwealth Bank, has long shown a greater exodus of residents from Sydney than Brisbane and Melbourne.

For the first time in 18 months, NSW has overtaken Queensland as the most popular place for city residents to find their new country home, according to the bank's lending data.

The NSW Snowy Valleys region, which includes the southern towns of Tumut and Batlow, attracted the largest percentage of new residents in the September quarter.

The majority of movers were millennials relocating from the ACT, the report showed.

The Gold Coast, Sunshine Coast and Fraser Coast in Queensland continued to be among the most popular destinations for people moving away from the cities and other regional areas.

Major growth spots in the past year were far from their state's capitals, including Douglas, in far north Queensland, and Ceduna, in coastal South Australia, which calls itself the "oyster capital".

“Good regional job prospects and the likelihood of better house prices and availability are attracting many people to these more remote regional growth hotspots," the bank's head of regional and agribusiness Paul Fowler said.

"Digital connectivity also means where you are is less relevant today.

"As a result, it’s likely many millennial small business owners are choosing to take advantage of the increasing investment and interest in regional development.”

The Regional Movers Index was launched at the height of the COVID-19 pandemic to track population flows away from the cities.

The most recent figures showed regional migration was 11 per cent higher than pre-pandemic levels, in part due to more than 90,000 job vacancies in country areas.

Ms Ritchie said the research showed regional growth was not a short-term trend.

"But to support our expanding regions, we need to ensure rental vacancy rates rise, building approvals keep pace with population growth and services like childcare and transportation are at suitable levels.”

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