Regional markets racking up double-digit growth

Nearly all of Australia’s 25 largest non-capital city regions recorded double digit annual price growth in the last year, while more than half of them recorded yearly gains of more than 20 per cent.

CoreLogic’s latest analysis of regional home values showed that cheap access to finance, the growing popularity (and need) of working from home and affordability advantages were the biggest contributing factors to the strong gains.

The seven regions that recorded the biggest value uplifts all experienced gains of more than 30 per cent in the year to October 31, CoreLogic said.

New South Wales’ Southern Highlands and Shoalhaven region led the nation’s non-capital city markets over the year, recording median price rises of 35.9 per cent.

Coming in second was the Richmond - Tweed region in northern NSW at 32.8 per cent, and Queensland’s Sunshine Coast, where annual growth was recorded at 32.3 per cent.

“The top performing regional areas were all coastal or lifestyle markets generally within a two-hour commuting distance of a capital city,” CoreLogic research director Tim Lawless said.

“These areas fit within the broad trend where demand has surged for lifestyle properties that offer a blend of liveability and commutability.”

For units, 18 of 22 regions analysed recorded at least a 10 per cent gain, while 12 markets recorded annual uplifts of more than 20 per cent.

Queensland’s Wide Bay was the clubhouse leader for units, with annual growth of 29.2 per cent, followed closely by the Sunshine Coast at 209.1 per cent.

The title for fastest-selling regional area went to the Gold Coast, where houses took just 18 days to sell in the 12 months to October 31.

Mr Lawless said days on market and vendor discounting was down substantially across all markets, with advertised listings currently 37 per cent below the five-year average while at the same time home sales are sitting around 24 per cent above the five-year average.

“This mismatch between available supply and demand has created a heightened level of urgency amongst buyers, generating strong selling conditions where homes are snapped up quickly with minimal levels of negotiation,” he said.

Looking forward, Mr Lawless said the longevity of the regional boom would hinge on affordability, with areas within reach of capital cities for commuters likely to remain highly sought after.

“If housing values across regional parts of the country continue to outpace the capitals, the obvious outcome will be that regional markets lose their affordability advantage,” he said.

“We can already see this trend taking shape in some of the most popular regional coastal markets such as Byron Bay where median house values are $1.7 million and Noosa on the Sunshine Coast in Queensland, where median house values are $1.2 million, much higher than comparable capital city values.”