Like the performance of the capital city detached housing markets, the majority of regional areas across the country have recorded an increase in values throughout 2013.
Of all the regional markets across Australia, only 16 council areas recorded a fall in median house values throughout 2013. This indicates that the majority of regional markets have recorded some growth in values over the year.
This suggests that it is not just the capital city housing markets that are benefitting from the low mortgage rate environment, so too are regional areas.
Looking at the 25 regions nationally that have recorded the largest increase in house values, Carrathool in New South Wales has recorded the greatest increase, up 35.0%.
Carrathool is a largely agricultural areas in the Riverina region of New South Wales. Across each state, Western Australia and New South Wales each have 10 of the 25 regions with the greatest value growth hollowed by: Victoria (4) and South Australia (1).[sam id=41 codes=’true’]
In New South Wales, Victoria and South Australia the regions that have recorded the greatest increases in house values could be best described as small regional markets which are in most instances located in non-coastal areas of the state.
The Western Australian results are somewhat different. A number of well-known coastal lifestyle markets which have underperformed for many years have seen some strong performances.
Some examples include: Augusta-Margaret River (19.9%), Capel (16.1%), Denmark (15.9%), Busselton (15.8%) and Murray (13.9%).
The results indicate a resurgence in demand for housing in these coastal and lifestyle locations which is supported by the fact that each region has recorded a rise in transaction activity throughout 2013.
Looking at those areas that have recorded the greatest falls, Isaac in Queensland has seen median house values fall by-12.4% over the past year.
Across the states, Queensland, New South Wales and Western Australia each have the greatest number of regions listed (6) followed by: South Australia (4) and Tasmania (3).
The main thing to note across those council areas that have recorded a fall or a low level of value growth over the year is the weakness in resource sector areas.
Many of the council areas listed are linked to the mining and resources sector, with investment in this are having peaked we are now seeing the impact of a lower demand for workers which is in a number of areas resulting in falling house values.
The list of the areas of strongest value increases and largest value falls are noticeably devoid of the larger regional areas, except for Gladstone.
Focussing on the 30 largest regional markets of the country ranked by population, each of these regions, except for Gladstone, have recorded an increase in median house values throughout 2013.
Again, this re-iterates that house values are generally climbing right across the country, not just within capital city markets.
Overall the data indicates that low mortgage rates are stimulating a higher level of activity across the detached housing markets. The general exception is within the mining and resource focussed areas where we are seeing a number of these areas recording falling demand and subsequent lower house values over the past year.
For 2014, we would generally anticipate more of the same with resource areas likely to lag and other regional markets to gradually record further value rises.
Of course the key challenge will be the rising level of unemployment which can be more detrimental to less diversified regional economies that it is to capital city markets.
However, with mortgage rates tipped to remain low and the Australian dollar to potentially fall further we see the attractiveness of housing, particularly in some of the larger regional markets, to grow over 2014.
Keep in mind many of these regions have seen limited value growth over recent years and with value growth strong in most major capital cities buyers may look to regional markets as move affordable viable alternatives to purchasing in a capital city.
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