House values surge in bush land boom

While house prices in Sydney have increased in value by 14.8 per cent over the past year, average house values in regional NSW have grown at nearly twice that rate – 26.9 per cent. Chris Fitzpatrick from the NSW Real Estate Institute says that prices have surged, due mainly to low interest rates and the federal government's first home owner's grant, which brought more than 76,000 new buyers into the market. The grant particularly helped the state's bigger regional areas, says Fitzpatrick.

The strongest growth was in NSW's far west, where the average house price jumped by 42.1 per cent to $138,000. In the south-east, prices went up by 41.6 per cent to an average of $165,000; in the central west by 26.8 per cent to $135,000, and the northwest prices grew by 15.3 per cent to $128,000.

Prices in areas surrounding Sydney also increased, particularly in the coastal areas. Newcastle's average house price increased by 24.4 per cent to $199,000, Wollongong's by 20 per cent to $240,000 and Wyong's by 9.9 per cent to $200,000.