Regional housing market booms, outpacing capital cities
With expectations of paying at least $1 million for a home in many Australian capital cities, buyers are once again looking to escape to the country.
The regional property market outpaced capital cities in the three months to January, according to figures published by data firm Cotality on Wednesday.
While housing values increased by 3.2 percent in regional regions this quarter, they increased by 2.1 percent in capital cities.
Competitive market conditions in cities, low housing affordability and an increase in domestic migration have led buyers to pack for the country long after COVID-19 lockdowns triggered the initial migration trend.
“With capital prices still near record highs and stock levels tight, many households are once again looking to regional Australia for greater value and liveability,” said the firm’s head of research, Gerard Burg.
“We are seeing momentum building in a wide range of regional markets, from inland hubs to coastal hubs and adjacent mining regions.
“This reflects a renewed movement of people and capital into areas where buyers’ budgets are stretched further and competition for available homes is strong.”
According to the PropTrack report published on February 2, Sydney’s median home value in January stood at $1.23 million, followed by Brisbane at $1.02 million and Perth and Adelaide above $900,000.
Compared to the prices of these cities, many of the fastest-growing areas offer only modest levels of housing affordability, if any at all.
The median value for Queensland’s Sunshine Coast was more than $1.2 million in January, with weekly rents at $832, according to data from Cotality.
Geelong, a Victorian port city and hotspot for Melbourne escapees, had a median of $771,298 and rents of $558.
The NSW Hunter region has long been one of Australia’s fastest growing regions, with median rents of $956,142 and $698 in Newcastle-Maitland.
The market report showed Wagga Wagga in southern NSW experienced the highest increase in value this quarter at 8.1 per cent.
The median in the regional city was $665,062 in January.
Among the states, the Western Australia Territory showed the strongest growth; values increased from 4.9 percent to 6.1 percent.
In Albany, a coastal city at the southern tip of the state, there was a 7.7 percent increase in value, with the average value being $783,389.
Queensland and South Australia markets also grew, while markets in regional NSW and Victoria showed only slight change.
Small local market declines were recorded in the Bowral, Mittagong and Bateman’s Bay regions in southern NSW and Warrnambool on Victoria’s Great Ocean Road.
The renewed focus on regions is not good news for all locals, as low rental vacancy rates are met with skyrocketing rents.
Regional rent growth was slightly above the capital cities, from 1.4 percent to 1.6 percent.
Rents outside the city have increased by almost 42 percent in the last five years; This rate was well above the wage increase of 17.5 percent.
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