- Regional Australia continues to lag behind the capitals on several metrics.
- Regional Victoria recorded some of the largest quarterly value declines
- Small pockets offered strong yields, as high as 9.3%.
Real estate in the regions continues to lag Australia’s capital city markets, according to the refreshed CoreLogic Quarterly Regional Market Update.
Analysing the country’s fifty largest non-capital Significant Urban Areas (SUAs), the report found factors such as soaring interest rates, the cost of living crunch, and internal migration returning to normal patterns have noticeably hit the regions.
Regional home value growth underwhelming
Values for the combined capitals bottomed out in January, according to CoreLogic, with values having since returned to new record highs.
The combined regional market, however, remains 2.5% below the May 2022 peak.
Results of individual areas varied, with just over a fifth (12, eight in Queensland, two in NSW, two in WA) of the fifty areas analysed recording new peaks in October; CoreLogic economist and report author, Kaytlin Ezzy, also noted four were within one per cent of previous record highs.
“Looking at quarterly value growth, WA’s Bunbury recorded the strongest rise, up 4.6% over the three months to October, followed by NSW’s Lismore, and St Georges Basin – Sanctuary Point, up 4.3% and 3.9% respectively,” said Ezzy.
|Rank||SUA name||State||Median value||3 month change|
|3||St Georges Basin – Sanctuary Point||NSW||$763,684||3.87%|
|7||Nowra – Bomaderry||NSW||$677,773||3.10%|
|8||Gold Coast – Tweed Heads||QLD||$907,076||3.09%|
|10||Shepparton – Mooroopna||VIC||$443,515||3.00%|
While New South Wales and Queensland did not take out top spot, areas across the two states made up most of the top 10 positions for 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%.”
Further south, the story was starkly different.
“In contrast, regional Victoria saw some of the largest quarterly declines, with dwelling values across Warrnambool and Ballarat falling -1.6% and -1.5%, respectively, while the coastal town of Batemans Bay in New South Wales (-6.9%) recorded the largest annual decrease. These markets are now seeing weaker growth conditions after strong gains during the pandemic upswing,” said Ezzy.
Slower and fewer sales
Ezzy observed that while dwelling values across three in four of the largest SUAs rose over the year, only one market saw sales activity grow.
“The flood-ravaged town of Lismore (NSW) saw the number of home sales rise from a flood affected low base, lifting 16.5% over the year to August.”
Queensland’s Gladstone recorded the smallest decline in sales, down only 1.2% from the strong volumes recorded the year prior.
Western Australia’s Kalgoorlie – Boulder and Geraldton both recorded mild declines, down 3.1% and 6.1%, respectively.
Annual sales volumes (12 months to August 2023)
|Rank||SUA name||State||Sales count (12m Aug 23)||Compared to prev 12m period||Compared to prev 5yr average|
|3||Kalgoorlie – Boulder||WA||974||-3.1%||55.8%|
|46||Traralgon – Morwell||VIC||812||-28.8%||-29.3%|
|48||Shepparton – Mooroopna||VIC||757||-29.0%||-21.9%|
Ezzy said the remaining markets all recorded double-digit falls in sales activity. Nelson Bay, in New South Wales, was the only market to exceed a 30% fall in sales activity, down 30.8%.
Selling times varied considerably throughout the nation. Western Australia’s Albany, Bunbury, and Busselton recorded median times on market of 18, 19, and 20 days, respectively.
The highest median time on market was recorded in Bowral – Mittagong, with homes typically spending 71 days on market.
Median time on market
|Rank||SUA name||State||Current (3m to Oct 23)||12m ago (3m to Oct 22)|
|47||Traralgon – Morwell||VIC||65||37|
|48||St Georges Basin – Sanctuary Point||NSW||70||56|
|49||Warragul – Drouin||VIC||70||38|
|50||Bowral – Mittagong||NSW||71||48|
Regional property market predictions for 2024
Ezzy expects a fair chance of softer housing market conditions ahead, following the recent cash rate rise and upwards revision in inflation forecasts.
“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.”