The CoreLogic Regional Market Update, which looks at capital growth over the 12 months to October in Australia’s 25 largest non-capital city markets, saw Tasmania’s Launceston & North East region remain the top performer for houses for the third consecutive quarter (10.5 per cent).
However, the thriving Tassie region lost its hold on highest yearly growth for units, replaced by New South Wales’ Southern Highlands & Shoalhaven unit market which recorded annual growth of 8.6 per cent in the year to October.
Best & Worst Performing Regional House Markets – October 2020
Best & Worst Performing Regional Unit Markets – October 2020
Looking at the biggest value declines, Western Australia’s Bunbury region recorded the lowest yearly house value growth for the second consecutive quarter, down -4.5 per cent, while yearly growth for units in Victoria’s Hume region fell -7.8 per cent over the same period.
Across all markets, houses continued to be the better performer, with 23 of the 25 largest regional house markets recording value rises, versus 18 regions with positive growth for units.
CoreLogic’s Head of Australian Research, Eliza Owen, said the traditional draw cards for regional dwelling markets such as lower density levels and lower purchase prices, coupled with the normalisation of working from home, have sparked increased interest among researchers.
Ms Owen said “The results of this report support increasing levels of demand outside of cities. Regional Australia’s dwelling markets had higher rates of growth relative to capital cities through the pandemic. In the year to October, combined regional Australian dwelling markets rose 4.8 per cent, compared with a 3.9 per cent lift in the capital cities.
“Migration numbers from the ABS show net internal migration to the regions rose to a record high in the June quarter. This was because movements to regional Australia increased, while departures from the regions slowed. 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. House sales volumes increased by double digits across the mid north coast, Illawarra and the Hunter Valley.
“Of the 50 house and unit markets analysed, only six markets continued to show declines over the year, including markets far from metropolitans such as Riverina houses, Cairns units and units in Central Queensland.
“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,” said Ms Owen.
However, while the story seems largely positive for regional Australia’s residential property market, there is a downside.
“For local first home buyers, declining affordability may become a problem. Growth may start to slow in regions that have already seen a sustained upswing, due to such affordability constraints. These include areas such as Illawarra, Newcastle and Lake Macquarie, the Gold Coast and the Sunshine Coast, where annual growth rates in houses have already exceeded 7 per cent in the year to October,” concluded Ms Owen.