CoreLogic’s latest Regional Market Update, which analyses 50 of the country’s largest non-capital Significant Urban Areas (SUAs), revealed dwelling values in regional Australia jumped 1.2% in the last quarter, outpacing the 1.0% increase recorded in the capital cities.
Outside the pandemic surge recorded between 2020 and 2022, CoreLogic research director Tim Lawless said the outperformance of regional markets relative to the capital cities is “a fairly new phenomenon”.
While the pandemic 2020-22 housing boom in regional areas was due to a Covid-accelerated shift from big cities, the recent trend is reportedly driven by the cooling housing market across the combined capitals.
“The more recent trend where growth in regional housing values has outpaced the capital cities is attributable to a slowdown in capital city growth rather than an acceleration in regional growth,” Mr Lawless noted.
WA, Queensland regional areas stand out
Western Australia’s coastal towns have taken the crown as the top-performing SUAs in the last quarter.
Albany and Bunbury recorded the highest quarterly rises, with value growth of 7.7% and 6.2%, respectively. Bunbury also recorded the strongest annual growth at 15.8%, bringing the median home value in the coastal spot south of Perth to $532,054.
Queensland, meanwhile, had the most non-capital SUAs (six of eight) that posted double-digit annual price growth, the highest of which were Bundaberg and Rockhampton, both up 12%.
Mr Lawless attributed the strong growth in WA and Queensland to their “diverse economic base generally supported by a mixture of agriculture, tourism, ports, and mining”.
“They’re the only states with a positive rate of interstate migration that helps support housing demand and they’re relatively affordable markets,” he said.
Despite high interest rates and affordability constraints, Australia’s growing population, driven by a surge in net overseas migration from mid-2022, has steered the upswing of property prices.
“Housing demand has been buoyed by high migration, but also tight rental markets that have incentivised renters to transition towards homeownership if they can afford to do so,” Mr Lawless said.
Perth further lifts WA’s standing
Perth (up 16.7%) not only maintained its position as the top-performing capital for property price growth but also outperformed all regional hotspots Down Under, with listings available for an average of 12 days, the shortest among all SUAs in the country.
Despite increasing values, Mr Lawless said Perth continues to attract homebuyers as the city “remains relatively affordable” compared with most capitals, with median dwelling value sitting just under $677,000.
Experts anticipate Perth will continue to lead Australia’s housing market with more years of huge gains that are expected to spill out into the suburbs close to the CBD.
Regional areas where property prices fell
Meanwhile, Tasmania's Launceston (down 2.3%) and Devonport (down 2.0%) posted the largest quarterly decline among all SUAs over the 12 months to January.
Annual price falls were recorded in 11 regional markets across Victoria, Tasmania, and NSW where the coastal market of Batemans Bay (down 5.8%) had the largest annual drop.
“A combination of affordability constraints following the pandemic surge in values, negative interstate migration and a normalisation in internal migration rates are other factors that are likely contributors to the softer conditions across Regional Victoria and Regional Tasmania,” Mr Lawless said.
Marginal increase in home values across capital cities
The median dwelling price in Australia’s combined capitals stood at $836,013 as of 31 January, higher than the nationwide median home value of $759,437.
Property prices were up 0.4% month-on-month, and a much higher 10% compared to the year prior.
Beneath the generally positive trend, the quarterly price growth in the capital cities was flat.
Only Perth (up 4.9%), Adelaide (up 3.7%), and Brisbane (up 3.2%) posted a quarterly increase of more than 1%. Dwelling values in Sydney, Canberra, and Darwin rose 0.1%, 0.2%, and 0.7%, respectively, in the three months to January.
Property price falls were noted in Melbourne (down 0.9%) and Hobart (down 1.5%).
Photo by Ross Ogston on Pexels
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