The latest CoreLogic Regional Market Update, which looks at capital growth over the 12 months to January 2021 in Australia’s 25 largest non-capital city markets, saw Richmond-Tweed claim top spot for houses with 12.6 per cent annual growth. The Southern Highlands & Shoalhaven took top spot for units for the second consecutive quarter at 17.9 per cent annual growth.
CoreLogic’s Executive Director of Research, Tim Lawless, says regional housing values rose at more than four times the pace than capital city markets over the 12 months to January.
“CoreLogic’s combined regionals index was up 7.9 per cent over the 12 month period compared with a 1.7 per cent lift in combined capital city home values. As more Australian’s look for properties outside of the capital cities, an imbalance between demand and supply is placing upwards pressure on housing prices. This is most apparent in markets like Richmond-Tweed, which includes high profile towns such as Byron Bay and Tweed Heads.
“Demand for regional housing can be attributed to a range of factors. Generally, prices are cheaper than their capital city counterparts, housing densities are typically lower which is likely to be appealing amidst a global pandemic, and many workers have a new found appreciation and ability to work remotely which is supporting additional demand.”
Best & Worst Performing Regional House Markets – January 2021
Best & Worst Performing Regional Unit Markets – January 2021
Mr Lawless says how long the trend of regional outperformance can last is anyone’s guess, but at the moment it looks like it has some momentum behind it.
“As the pricing gap narrows between the regions and capital cities, the challenge of affordability will naturally drag on demand. Similarly, as the virus is more comprehensively brought under control, we will likely see more employers looking for their staff to return to the office, at least on a rostered or flexible basis.
“However, to some extent we expect the rise in popularity of regional markets will persist into the future. Many workers and employers have found the working from home experiment to be successful, with productivity remaining high while workers enjoy additional flexibility in their work life balance. Areas that offer up the best of both worlds; an ability to commute into the capital city metro areas while living regionally may be more successful long term.”
Most of the reporting on regional areas around the country has focussed on the main population centres outside of the capital cities, such as high profile coastal regions like Byron and Noosa, or semi-rural markets like the wine regions and hinterland locations close to the major metro regions. However, recent CoreLogic analysis* on the annul change in house values across rural in-land council regions found many of Australia’s in-land rural markets are also showing strong housing market conditions.
Mr Lawless says “32 of the 91 in-land regions analysed had house values tracking at record highs in January 2021. These were typically skewed towards the largest rural population centres, where economic conditions generally show greater diversity. Seven of the 10 largest population centres recorded house values at historical highs. On the flipside, 41 of the 91 council regions analysed recorded house values that remained at least 10% below their historic highs.
“Many of these markets are moving out of a period of extended decline, mostly due to either drought conditions or the mining downturn. The rise in values is likely to be a welcome development for long-term home owners in the area,” says Mr Lawless.