Movement across the nation fell by 11 per cent in final three months of 2023, while the number of people moving from the cities to the country dropped by nine per cent, internal migration data shows.
The Regional Movers Index, a quarterly population report, hit a four-year low, with movement from the capitals to the regions sitting just above pre-pandemic levels.
"This is attributed to the typical seasonal trend of reduced mobility in the last three months of the year and the uncertainty that 2023 delivered through repeated interest rate rises, and high property prices," the report says.
But Australians continue to seek a country life, with 25 per cent more people moving from the cities to the regions than in the other direction.
During pandemic restrictions, that rate peaked at an average of 53 per cent.
The Index, compiled by the Regional Australia Institute using Commonwealth Bank data, shows the fastest growing regions are Boddington and Bridgetown-Greenbushes in WA and Bellingen, NSW.
WA was increasingly appealing for its diverse industries, bank executive Paul Fowler said.
"WA's economy is strengthening beyond traditional resources, with wholesale trade, construction, professional services and agribusiness coming to the fore," he said.
The Queensland coast had the biggest share of movers, along with Greater Geelong and Moorabool in Victoria.
Capital city residents tended to move to regions close to the cities, including the Queensland's Sunshine Coast, while country residents chose regional hubs such as Toowoomba in Queensland and Maitland in NSW.
"Regional Australia offers something more for many people, especially those from big cities: more space, more time, more affordability," institute chief executive Liz Ritchie said.
"This shift away from capital city living has been under way for a decade.
"It was definitely supercharged by COVID, but this data proves the regions are still very desirable for a significant proportion of the population."
The federal government's recent State of Australia's Regions report shows the population shift has increased the time to save for a house deposit in the country to 9.7 years.
That put the regional market only slightly behind capital cities, where it takes 10 years to get a deposit.
A report by CoreLogic released on Monday showed the regional housing market is outperforming the capital cities despite an easing of regional growth.
The institute said the next data set would confirm whether the migration drop was a sustained trend or a seasonal dip.
