Millennials are making up the bulk of Australians moving to regional areas even as migration out of big cities trends back down to pre-pandemic levels.
But even as movement slows, a rise in rents and shrinking housing stock in the regions has sparked calls for a federal plan to help communities provide for growing populations.
The latest Regional Movers Index from the Commonwealth Bank and the Regional Australia Institute shows the spike in Australians leaving metropolitan areas, spurred by the COVID-19 pandemic, has slowed.
The number of people leaving metropolitan areas declined 16.5 per cent between the March and June quarters.
Net migration to the regions - which includes overseas migrants and intra-regional movement - also declined 35 per cent over the same period, but was still outstripping net migration back to cities.
Millennials, counted here as people aged 24 to 40, were the largest demographic moving from the city to the regions before the pandemic, but this trend increased after 2020.
In NSW, the median age of a regional mover fell from 37 before COVID-19 to 33. In South Australia it went from 38 to 34, and in Queensland 35 to 33.
Regional Australia Institute chief executive Liz Ritchie said the slowing of migration should ease growing pains for the regions, such as high rents and low housing supply.
"We know people are happier when they choose a life in the regions," Ms Ritchie said.
"But investment in creating a sustainable model for regional Australia to accommodate the changing nature of our population trends is needed."
Coastal cities close to the state capitals are welcoming the largest share of metropolitan migrants on the east coast, including the the Gold Coast, the Sunshine Coast, Geelong and Wollongong.
Three of the five highest-growing regional local government areas were in South Australia, with Mount Gambier in the state's southeast at number one.
Bathurst in NSW made the top five list for the first time.
Commonwealth Bank regional and agribusiness executive general manager Paul Fowler pinned part of Bathurst's growth on projects in the region driving up employment.
Overall, Mr Fowler said the agriculture and manufacturing sectors were driving a lot of the regional movement.
"Regional economies are booming, many businesses are investing and innovating to strengthen their capabilities and grow," he said.
Mr Fowler said the regional jobs market was incredibly strong with more than 86,000 job vacancies Australia-wide, in many cases outstripping housing supply.
"In Geelong there are 10 times as many jobs than there are houses," he said.
Tight regional housing supply translated to higher price growth compared to the cities.
"We've seen regional house prices over the last 12 months to July increase by about 17 per cent. That compares to city house prices at about five per cent" Mr Fowler said.
