Tim Lawless, Head of Research comments on the latest quarterly results: Broadly, regional housing values have held firm through the COVID period compared with their capital city counterparts, with dwelling values across the combined regional areas of Australia slipping by only 0.1% between March and the end of July, while capital city home values are down 2.0% over the same period.
While the region by region data shows diversity, the relatively steady conditions across the regional markets of Australia can probably be attributed to factors such as less impact on housing demand from stalling overseas migration; Close to 85% of Australia’s net overseas migration flows into the capital cities. Also there likely remains some momentum in the trend towards rising demand for lifestyle properties that was prevalent prior to COVID-19.
Regional areas offer up a variety of advantages and risks compared with their capital city counterparts.
On the positive side, housing prices tend to be lower, providing a more affordable entry point to the market, population densities are generally lower which is something that might be even more appealing as we move through this pandemic, and in many examples, regional areas will offer some lifestyle advantages, either via the locations proximity to the coastline or wide open spaces.
On the downside, regional economic conditions can be more volatile, especially those areas that are heavily dependent on a single industry for economic prosperity, and some areas may not show the same level of amenity and access to essential services as a capital city or major centre.
The detail in the report shows several of the major urban centres within close proximity to Sydney and Melbourne have shown the tightest detached housing market conditions over the past twelve months. The Illawarra region has recorded both the largest rise in housing values, as well as the biggest jump in home sales over the past twelve months, while Victoria’s Ballarat has shown the strongest selling conditions, with homes selling in just 30 days and with minimal discounting levels.
Across the unit market it is the Launceston and North East region of Tasmania that tops the tables with unit values rising almost 15% over the past twelve months.