Login
iscover
Though from a national perspective both rents and home values appear to be reaching new highs, the regions tell a different story.
According to CoreLogic’s Quarterly Regional Market Update, which analyses value and rent changes across the country’s largest 50 significant urban areas (SUAs) outside of the capitals, many regional housing markets have fallen behind their capital city counterparts over the past year.
Since home values hit a recent low in January, prices across the combined capitals have risen to new record highs, while the regional market remains 2.5 per cent below May 2022’s peak.
According to CoreLogic economist and the report’s author, Kaytlin Ezzy, several factors have led to the regions’ delayed bounce back, including rising interest rates, higher cost-of-living pressures and normalising internal migration patterns.
Ms Ezzy was quick to note that individual areas also have local economic factors weighing on them, with some performing near or on par with their capital counterparts.
In fact, 12 of the non-capital SUAs recorded peaks in October, with four sitting within 1 per cent of their previous record highs.
“Looking at quarterly value growth, WA’s Bunbury recorded the strongest rise, up 4.6 per cent over the three months to October, followed by NSW’s Lismore and St Georges Basin–Sanctuary Point, up 4.3 per cent and 3.9 per cent respectively,” Ms Ezzy said.
NSW and Queensland were undeniably the best-performing states this month, with each home to four of the top 10 positions in terms of quarterly value growth.
“Queensland also made up half of the top 10 for annual value growth, with Bundaberg and SA’s Mount Gambier both recording annual growth above 10 per cent,” Ms Ezzy noted.
Regional Victoria, on the other hand, saw some of the biggest declines over the quarter. Dwelling values across Warrnambool and Ballarat fell -1.6 per cent and -1.5 per cent, respectively.
Though it was the NSW coastal town of Batemans Bay that recorded the largest annual decrease. As an attractive lifestyle location, many coastal markets are lagging behind their 2022 highs, which were largely driven by COVID-19-era relocators.
“These markets are now seeing weaker growth conditions after strong gains during the pandemic upswing,” Ms Ezzy said.
Sales volumes also appeared to be depressed across the regions, with most markets recording double digit drops in sales activity compared to last year.
The smallest decline in sales volume was recorded in Queensland’s Gladstone, falling just -1.2 per cent from the strong volumes recorded the year prior, while Kalgoorlie–Boulder and Geraldton, both in Western Australia, recorded mild declines of -3.1 per cent and -6.1 per cent.
Lismore, in NSW, bucked the trend, owing to its flood recovery. The northern NSW town saw sales activity lift 16.5 per cent over the year to August, following the devastating floods of February and March of 2022.
In the rental market, growth has similarly fallen behind the capitals, though the rises in the capitals are considered substantial, with record low vacancy rates afflicting many of the country’s biggest city markets.
“Fuelled by strong net overseas migration, smaller household sizes and limited stock, the combined capitals have seen rents rise 1.8 per cent over the past three months. In contrast, normalising migration patterns have seen regional rents record a milder 0.8 per cent rise,” Ms Ezzy said.
Even so, rents were up in a majority of the capital regions. Across regional SUAs, 38 areas saw rents rise over the three months to October, with eight recording a rise of 3 per cent or more.
South Australia’s coastal region of Victor Harbor–Goolwa recorded the highest quarterly increase in rents, rising 4.6 per cent. Western Australia’s Bunbury followed in close second at 3.9 per cent, and Queensland’s Bundaberg and Maryborough tied for third with rises of 3.5 per cent.
Conversely, NSW’s Batemans Bay recorded the greatest fall in average rents, which were down 5.4 per cent over the quarter.
Looking forward, Ms Ezzy said that with an additional rate rise coming into play, movement in the regions’ home values and rental prices is expected to be slow.
“We’re already seeing an easing in the pace of monthly growth across our largest cities, and this is a trend we can expect to see playing out more broadly at least until interest rates top out,” she said.
“Higher interest rates, higher housing prices, higher rents and high cost of living pressures are likely to weigh on buyer sentiment leading into 2024,” she added.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
You are not authorised to post comments.
Comments will undergo moderation before they get published.