Australia's hottest regional property markets revealed
Property investors and homeowners outside of Australia’s capital cities are cheering, with the country's biggest regional markets enjoying almost universal house price gains.
From the chilly hillsides of Launceston, which has been identified as the nation’s best-performing regional property market, to the sub-tropical garden city of Toowoomba in Queensland, 23 of Australia’s 25 largest regional centres recorded house value rises.
Across the unit market, 18 of the 25 regions recorded a rise in unit values over the year to October.
CoreLogic's Regional Market Update analysed growth between November 2019-October 2020 and revealed combined regional dwelling markets rose 4.8 per cent, compared with a 3.9 per cent lift in the capital cities over that period.
The Launceston and North East region in Tasmania recorded an annual growth rate of 10.5 per cent in October 2020, making it the best performing regional house market.
South of Perth, the Bunbury area had the dubious distinction of seeing the highest change in sales volumes for houses across the region, up 24.6 per cent over the year to August 2020, but also the lowest yearly growth, with house values down 4.5 per cent over the same period.
With resurgent interest in the Perth market, demand for surrounding regional centres was possibly being dampened by greater demand for city properties. The control of the pandemic also obviated the desire to get out of town that was experienced in lifestyle towns elsewhere in Australia.
CoreLogic's Head of Australian Research Eliza Owen said regional Australia's dwelling markets had higher rates of growth relative to capital cities through the pandemic.
“Migration numbers from the ABS show net internal migration to the regions rose to a record high in the June quarter as movements to regional Australia increased, while departures from the regions slowed,” Ms Owen said.
“As a result, demand for dwellings in regional Australia will have risen at a time when the stock available for sale is relatively low.
“Commutable regional areas within a reasonable travel distance to the major metropolitan centres have seen particularly extraordinary increases in demand, with house sales volumes increasing by double digits across the mid north coast, Illawarra and the Hunter Valley.”
As affordability again moved out of reach for another cohort of first-home buyers, other markets were at risk of peaking and easing off in 2021.
“With record low mortgage rates and confidence returning to the Australian economy, there is likely to be a broader-based upswing across both regional and capital city markets into the first quarter of 2021,” Ms Owen said.
“Affordability constraints may limit further price growth in areas such as Illawarra, Newcastle and Lake Macquarie, the Gold Coast and the Sunshine Coast, where annual growth rates in houses have already exceeded seven per cent in the year to October,” she said.
While Tasmania’s north-east recorded its hat-trick of quarterly gongs for top regional price increases, its unit price performance crown was snatched this quarter by New South Wales’ Southern Highlands and Shoalhaven unit market, which recorded annual growth of 8.6 per cent in the year to October.
At the other end of the scale, yearly growth for units in Victoria’s Hume region fell 7.8 per cent over the same period.
Gross national happiness
When it came to sellers’ happiness with the prices they were achieving for their properties, regional areas across the country gain achieved a higher rate of satisfaction than their city counterparts.
Country towns are seeing properties sell for above-expectation prices, with 41 per cent of vendors receiving a better sale price than expected – a six per cent growth on happiness from Q2 (April to June) 2020. This compared to 39 per cent in metropolitan areas.
The widest smiles were in the smallest territory, with the ACT having 54 per cent of vendors achieving higher than expected prices. Tasmania was close behind (53%), ahead of South Australia (45%), Victoria (41%), New South Wales (40%), Queensland (38%) and Western Australia (34%), according to analysis of more than 20,000 respondents in RateMyAgent’s quarterly Q3 2020 Price Expectation Report (July to September).
Growth in regional areas was seen prominently in Victoria (45%) and New South Wales (42%), with both regions reporting higher price statistic results compared to metropolitan areas in Greater Melbourne (39%) and Sydney (38%).
The restrictions on inspections and an unstable market in Victoria during Q3 saw many sellers hold back from placing their homes on the market, according to Mark Armstrong, co-founder of RateMyAgent.
“This saw a decrease in supply of properties on the market and in turn saw prices increase – this is reflected in the high price satisfaction results in regions across Victoria,” Mr Armstrong said.
Mr Armstrong said the report showed a good recovery trend for the regional Australian property market, despite continued economic uncertainty.
“Agents and vendors in regional markets should welcome 2021 and the spring-summer sales season with high levels of optimism as potential buyers look for a tree or sea change in response to government incentives, Reserve Bank of Australia interest rate cuts and high returns.”