- 18 out of 25 regional housing markets recorded annual declines.
- Only five regional unit markets recorded positive annual growth.
The majority of Australia’s regional property markets recorded annual declines despite regional housing values rising for the past five months, according to the latest CoreLogic Regional Market Update.
Out of 25 markets, 18 recorded annual declines in housing values over the year to July 2023. The seven exceptions were the South East region in South Australia (9.1%), Bunbury in Western Australia (3.7%), Central Queensland (2.7%), New England and North West in New South Wales (1.6%), Mackay-Isaac-Whitsunday in Queensland (1.2%), Toowoomba (0.7%), and Cairns (0.5%).
Two main factors were behind the impact on regional Australia: interest rate hikes, and a shift in migration patterns back to pre-Covid levels.
“While the market is starting to recover, value growth is largely being led by capital city markets, reflecting milder housing demand across regional Australia as demographic patterns normalise,” said CoreLogic Australia’s head of research, Eliza Owen.
“Year-on-year growth was hard to find across regional Australia in the past 12 months. The markets that saw an increase were largely more affordable, and were more rural. Presumably, lower value assets have been more resilient to increases in interest costs because they require lower indebtedness.
“Additionally, targeted migration programs also tend to focus on parts of regional Australia as a pathway to permanent residence, so some of the more rural, regional parts of the country may have seen sustained housing demand as international travel restrictions have lifted through 2022,” she said.
|Yearly growth||9.1%, South East (SA)||-20.4%, Richmond-Tweed (NSW)|
|Change in Sales Volumes||-11.3%, Townsville (QLD)||-33.6%, Southern Highlands and Shoalhaven (NSW)|
|Days on market||26 days, Toowoomba (Qld) & Bunbury (WA)||79 days Southern Highlands and Shoalhaven (NSW)|
|Vendor Discount||-6.7% Southern Highlands and Shoalhaven (NSW)||-3.4% Bunbury (WA)|
Riverina units excel
Five of Australia’s regional unit markets recorded positive annual growth in the 12 months to July 2023.
The Riverina region in NSW saw unit values rise 18.7%, double the next strongest markets of Cairns (9.2%) and Hume, Victoria (9.1%).
Richmond-Tweed was at the bottom again, recording an 11.4% decline in unit values over the 12 months to July, equal with Launceston and North East Tasmania.
Will prices continue to decline?
The higher the value of the market, the more likely it has seen poorer performance in the past year, said Owen.
“But the good news for sellers is that these markets appear to have passed through the depths of the downswing.
“Using Richmond-Tweed houses as an example, while the asset has seen an annual decline of 20.4%, this is up from a year-on-year fall of -24.2% in the 12 months to April.
“In two of the past three months, houses in this market have actually increased.”
Eliza Owen, CoreLogic
“While there are still a few headwinds on the horizon for housing market performance more broadly, popular high-end markets could start to stabilise as mortgage rates move closer to a peak, and capital city markets become more expensive,” said Owen.