Login
iscover
Despite a broader slowdown across regional markets, mining hubs in Queensland and Western Australia have seen strong growth, driven by affordability and lifestyle appeal.
CoreLogic’s latest Regional Market Update has revealed that dwelling values in regional areas increased by 1.1 per cent over the three months to October, surpassing the 0.8 per cent growth recorded across the capital city markets.
Although the pace of growth has eased since earlier in the year, the report observed that regions in Queensland and Western Australia have continued to lead by taking out the top eight spots for quarterly value growth areas.
CoreLogic Australia economist and report author, Kaytlin Ezzy, said that mining markets stood out among the top performers across multiple metrics, with Queensland’s Mackay leading for quarterly growth with an 8.3 per cent increase, followed by Geraldton in Western Australia at 8.2 per cent, and Townsville in Queensland at 6.6 per cent.
The report highlighted Geraldton as the top performer for annual growth, with dwelling values surging over the year to October and boosting the median value by over $100,000. Gladstone and Townsville in Queensland also notched up notable annual increases of 27.2 per cent and 26.9 per cent respectively, according to CoreLogic.
Weighing in on regional Queensland’s standout performance, Ezzy commented that “regions like Mackay, Geraldton and Townsville are seeing exceptional growth, driven by affordability advantages compared to our major cities, as well as lifestyle appeal”.
“This will have contributed to the strong demand but even with the impressive growth, for those with the capacity to service a mortgage, they still remain attainable with medians less than $600,000,” Ezzy said.
Contrastingly, the report’s analysis of the 50 largest non-capital city significant urban areas (SUAs) showed that property values declined in seven out of eight Victorian SUAs and 10 out of 21 NSW SUAs over the three months to October.
Across the nation, the town of Batemans Bay on NSW’s south coast registered the largest decline, down 2.7 per cent over the quarter, and was followed by the Victorian city of Warrnambool, which saw a decrease of 2.6 per cent.
Over the year, property values declined in 10 markets across NSW and Victoria, led by Ballarat where values fell by 6.3 per cent, while the St Georges Basin – Sanctuary Point region in NSW and the Warragul – and Drouin region in Victoria both recorded decreases of 3.9 per cent.
Ezzy partly attributed the downturn in regional coastal and lifestyle markets of Victoria and NSW to a gradual shift away from the heightened demand for spacious and affordable areas seen during the COVID-19 pandemic, noting that “reduced affordability and a range of headwinds have since softened conditions”.
“There’s certainly been a slowdown in demand for these areas and more stock on the market and that’s in addition to higher interest rates, cost of living pressures, and limited borrowing capacity,” Ezzy said.
Regional rental markets surpass capital cities
CoreLogic reported that regional rental markets have continued to outperform their capital city counterparts, with rents rising 0.5 per cent over the quarter compared to the flat conditions in the capital cities.
Albany in the south-east of Perth recorded the highest quarterly increase in rents, rising 3 per cent, with Mount Gambier in South Australia following closely at 2.7 per cent.
“Rental markets where there’s been strong quarterly increases are experiencing a combination of strong tenant demand and constrained supply,” Ezzy said.
Gross rental yields were observed to be the highest in regional Western Australia, with Kalgoorlie-Boulder recording a yield of 8.8 per cent for the quarter even after easing 70 basis points from a peak of 9.5 per cent in March of this year.
Conversely, the Bowral-Mittagong region in NSW continued to register the lowest gross rental yields at 3.2 per cent.
Regional sales remain robust
Despite a broader slowdown in growth momentum, sales activity was observed to have remained strong in many regional areas.
Notably, Geraldton in Western Australia and Gladstone in Queensland emerged as “standout performers” with annual sales volumes increases of 44.2 per cent and 34.3 per cent, respectively.
Across these two regional markets, Ezzy highlighted that both areas’ “lifestyle appeal, relative affordability and favourable conditions for investors were driving buyer confidence in these regions”.
“Despite challenges such as high interest rates, affordability pressures and economic uncertainty in other parts of the country, momentum in these leading regional markets remains strong,” Ezzy said.
You are not authorised to post comments.
Comments will undergo moderation before they get published.