Over 2012, home value growth (combined houses and units) across regional markets of Australia has varied from a 20.6% increase in values in the Western Australia’s Pilbara region to a -9.6% fall in values in South Australia’s Murray Lands region.
Across the 51 regional markets analysed for home value growth, 40 recorded an increase in values over the year with the remaining 11 regions seeing values fall.
The markets which have recorded the largest increases in values can generally be characterised as either linked to the mining and resources sector or agricultural areas of the country.
On the other hand, the regions which have recorded value falls are mostly areas linked to the tourism sector and many of them are coastal.
The areas which have recorded value falls include Queensland’s Gold Coast, Sunshine Coast and Far North Queensland and the Richmond-Tweed region of northern New South Wales.
Of course, as always the performance of the market varies greatly between detached houses and units.
Across the 51 regional statistical divisions around Australia, the housing market performance has varied from a 21.1% increase in the Pilbara region to a fall of -10.0% in the Murray Lands region of South Australia. Similar to the performance of the combined dwellings, 41 regions have recorded growth in house values with the remaining 10 seeing values fall over the year.
The unit market has far fewer regions in which we calculate figures (due to the small size of the unit market outside of the major regional centres), just 15 major regional areas nationally. Of these regional markets, value changes over the year have varied from a fall of -4.4% in the Far North region of Queensland to a 13.4% increase in South West Western Australia. Only 6 of the 15 markets have recorded value growth throughout 2012.
Overall the results suggest that a majority of regional markets have recorded value growth over the year however, it is clear that the detached housing market has typically been stronger than the unit market.
The statistics which are much more telling of the market performance are those which look at the decline in values from the market peak.
Of the 51 regional detached housing markets, only 20, or 39.2%, have a current value which is at a record high level. In each remaining market values sit below their historic high. The fall in values from the market peak is greatest in the Murray Lands region of South Australia where values are currently -16.2% below their historic high. The regions with the greatest magnitude of falls tend to be those in regional South Australia and coastal housing markets.
Regional unit markets have generally recorded much greater overall value falls since the respective market peaks. As at December 2012, only 4 of the 16 regional unit markets had values at historic highs (25%). In certain areas, values continue to languish at levels well below historic highs. Unit values are currently -22.0% lower than their peak in the Far North region of Queensland, down -19.5% on the Gold Coast, -16.7% lower on the Darling Downs in Queensland and -16.2% lower on the Sunshine Coast.
The weakness in unit markets, particularly those in prominent coastal markets shows over-supply issues in many of these areas coupled with a drop in demand since the on-set of the financial crisis.
Overall the results indicate that detached housing markets in regional areas have generally performed at a similar to slightly superior level in terms of value growth over the past year compared to the performance of capital city markets. On the other hand, unit markets have generally been significantly weaker, particularly within many prominent coastal markets of Queensland.
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.