Regional Australian home prices reach a record high
Australia’s regional markets have hit new heights, with dwelling values across the combined regional areas rising a further 0.4 per cent in January, according to property data company CoreLogic.
The median home price across combined regional Australia sits at $656,545.
It comes at a time when combined city prices have dropped and the country’s most expensive city, Sydney, had another decline in home values.
“While we’re definitely seeing some evidence that the value growth has cooled down, it is well and truly in positive territory,” CoreLogic research director Tim Lawless said.
“Regional markets seem to be benefitting from a second wind of internal migration.”
Remote beats commuter cities
However, while the strongest growth in regional home prices has been focused on commuter cities – regional cities that allow a mix of hybrid work at home and in city offices – more recently it is in more far-flung locations.
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“It’s not your usual suspects really driving the strength in regional Australia but [rather] those that are more remote to capital cities,” Lawless said.
Townsville, Rockhampton and Gladstone in Queensland, Western Australia’s Geraldton and Bunbury, and the Barossa in South Australia were some of the regions with the strongest home price growth.
“The days of commutable regional towns leading the league tables are behind us and it really seems that the growth trend has now switched to markets that are often more resource driven or related to extractive industries and ports,” Lawless said.
He said their relative affordability was also a factor in the recent price rises.
“They have a real affordability advantage and they’re probably benefitting from that recipe of high demand and low supply,” he said.
Another reason is the “diversified regional economies” in these towns and cities, bringing strong employment opportunities.
While home price growth in commutable cities was not as strong in the past month, it has remained stable and had been some growth in some areas.
Lawless said this was because there appeared to be “some permanency in hybrid working arrangements across some occupations and industries”.
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Most recent Australian Bureau of Statistics’ reporting on working arrangements revealed 36.3 per cent of employed people usually work from home – down from a high during the Covid period, but still above the 32.1 per cent reported in 2019.
Opportunities in Melbourne
Overall national home values fell by -0.03 per cent, with both Sydney and Melbourne experiencing further falls in prices.
Sydney had a fall of 0.4 per cent in January, while Melbourne was down 0.6 per cent.
“Sydney is probably following Melbourne’s lead,” Lawless said.
“In Melbourne there is a fairly entrenched downturn … [it] has been in decline since early 2022.”
He said strongly forecast interest rate drops could come as early as this month, making Melbourne a good choice for buyers.
“With interest rates coming down, it might throw a bit of a lifeline to Melbourne, where affordability has really improved since market peaks back in March 2022,” Lawless said.
However, the opportunities in Sydney, even after rate cuts, could be slimmer.
“I simply can’t see Sydney responding as positively to lower interest rates as Melbourne, simply because I think that affordability barrier is going to be getting in the way for a lot of buyers.”
This article first appeared on View.com.au. Read the original here
