Often considered to be the laggards in the upturn in a property market cycle, Australia’s regional property markets are currently experiencing a flow-on effect from strong capital city market activity, with a rise in house and unit values recorded over the past 12 months to May 2017.
Covering the 50 most populous non-capital city council areas, after a long period of soft housing market conditions post the 2008 GFC, we’re seeing a pick-up in housing demand across these regions as buyers look outside the capitals for more affordable options.
While a majority of the regions are showing an upward swing, areas linked to the mining and resources sector are continuing to see values fall.
Of the non-capital city council areas analysed, areas close to Sydney are seeing the strongest growth in New South Wales.
As an example, the Wollongong council area is the most expensive for houses ($730,427) and units ($530,170).
The area also recorded the greatest increase in house values, and now holds the fourth highest increase in unit value over the past year.
Places like Wollongong are on the rise as demand ripples away from Sydney where affordability constraints are more pressing.
Regional areas in Victoria which are close to Melbourne are experiencing value growth, however, it is nowhere near the magnitude to which values are growing in those locations close to Sydney.
Although values are rising, the softer growth can be linked to the fact that values have not risen as sharply in Melbourne as they have in Sydney and subsequently affordability hasn’t deteriorated as severely in Melbourne.
For Queensland, the results are more mixed with the south-east corner generally seeing values rise, while across the remainder of the state, growth is extremely mild or values have fallen.
Stripping the spotlight from Brisbane, CoreLogic confirmed that the Gold Coast, Sunshine Coast and Noosa are now seeing more rapid value growth than for Brisbane.
It seems as though much of the demand across these regions is coming from an acceleration in internal migration to Queensland, and where buyers from Sydney and Melbourne are using substantial equity earned to secure lifestyle properties in the state.
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Of the areas observed by CoreLogic, each of the 24 regions highlighted in New South Wales have recorded value growth for houses over the past year.
For units, only 4 of the 24 regions have recorded value falls over the past 12 months.
In Victoria, of the 10 regions analysed, two recorded value falls over the year for houses and 2 regions also recorded falls for unit values.
Greater Shepparton was the only council area of the state which recorded value falls for houses and units.
Of the 13 regions highlighted for Queensland, five have recorded value falls for houses over the past year and seven have recorded declines for units.
Each of the regions highlighted in Western Australia have recorded value falls over the past year for houses and units.
Launceston was the only region analysed in Tasmania and it has seen house and unit values rise over the past year.
It should be noted while values have increased they have done so at a more moderate pace than those in Hobart.
Overall, we’re seeing housing demand in regional areas of the country is rising.
While many regions are seeing values increase, the strongest demand appears to be in those areas within relatively close proximity to capital cities, particularly those which are coastal and tap into lifestyle demand.