Australia's regional areas under spotlight as value growth increases and capital city markets become less affordable.
CoreLogic observations confirmed that with most major regional areas now seeing an increase in home values, demand for housing in the regions is picking up and follows a number of years of being in the doldrums. As an example, markets such as June quarter top performer, Illawarra, recently recorded its largest annual increase in values for houses at 14.3%, and units at 13.9%.
Released today, the CoreLogic Regional Market Report provides analysis on the performance of Australia’s largest council areas for:
- NSW: Newcastle & Lake Macquarie, Illawarra, Richmond-Tweed;
- VIC: Geelong, Latrobe-Gippsland;
- QLD: Gold Coast, Sunshine Coast, Townsville Wide Bay, Cairns;
- WA: Bunbury.
While the Illawarra region recorded the largest annual increase in values for both houses and units, CoreLogic research analyst Cameron Kusher said, “given that the Illawarra is close to Sydney, the result for the regional is likely to be contributing to its strength with some buyers priced out of the Sydney market now looking to this region.”
In contrast, the only regional market to record a fall in values, was Townsville where houses dropped by 4.5 per cent. Consistent with the Townsville result for houses, unit values in the city dropped by -3.7 per cent. Unit values were also lower across the regions of Wide Bay at -1.2 per cent, and Bunbury at -6.0 per cent.
In NSW, Newcastle and Lake Macquarie, and the Richmond-Tweed regions, saw home values rise by less than 10 per cent compared to stronger levels of growth in the Illawarra region. Transaction activity was lower over the year in two out of the three regions, with Richmond–Tweed showing a year-on-year growth in sales activity.
In Queensland, the two leading lifestyle markets of the Gold Coast and Sunshine Coast were the strongest performing regions across the state over the period, with an increase for both house and unit values.
Transaction activity results were mixed with sales volumes across the Gold Coast remaining steady over the year. However, these were well above the five-year average.
Both the Gold Coast and Sunshine Coast are recording annual rates of growth similar to that in Brisbane indicating rising demand for homes across the South-East Queensland region.
Across the Sunshine Coast, volumes fell over the 12 month period. Townsville, Wide Bay and Cairns followed with median values remaining relatively flat, or falling.
In Victoria, sales activity in Geelong and Latrobe–Gippsland dropped by 2 per cent over the year; however median values and rental rates increased over the year. Geelong recorded the strongest performance, with house values rising by 5.6 per cent and unit values up 3.4 per cent, while across the rental market, advertised rental rates were up 3.0 per cent and 3.6 per cent respectively.
In Western Australia, the Bunbury region recorded mixed performance over the year. House values rose (+3.0 per cent), while unit values fell (-6.0 per cent).
CoreLogic research analyst Cameron Kusher said, “Overall, market conditions in Bunbury remained fairly weak over the period and is largely demonstrated by the fact that 14.3 per cent fewer homes sold over the year to June 2016 when compared to June 2015.”
“Our latest data points to an increase of value growth in regional markets, particularly those which are located adjacent to capital cities. As people are priced out of certain capital cities, buyers now appear to be looking to these adjacent regions.”
“Home owners in Sydney and Melbourne have seen a substantial rise in housing equity over recent years. Subsequently we are seeing some evidence that these buyers are starting to look for holiday and investment properties in certain regional markets which is also providing an impetus for some of the value growth we are currently seeing,” he said.
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In compiling this publication, RP Data Pty Ltd trading as CoreLogic has relied upon information supplied by a number of external sources. CoreLogic does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever and limits any liability it may have to the amount paid to CoreLogic for the supply of such information.