The majority of Australia’s 25 largest non-capital city regions have reported double-digit annual house value growth, achieving a record increase in house values over the past year.
Of the 25 regions analysed, 24 recorded double-digit annual growth for house values while more than 50% of the regions recorded an annual rise of more than 20%, according to a new CoreLogic report.
The rapid rise in regional house values is attributed to cheap access to credit, the newfound popularity of working from home and an affordability advantage.
CoreLogic Research Director Tim Lawless said localised factors influenced each region but common key drivers included a shift away from capitals to regional areas, low-interest rates and access to credit, higher household savings and relatively affordable housing values compared to capital cities.
“There has been a broad demographic shift where more Australians are prepared to consider housing options outside of the capital cities, which has seen net internal migration rates to regional Australia reach record highs,” he said.
“Working from home looks to have some degree of permanency post-COVID and is one of the catalysts of this trend, with more people basing themselves in regional locations to work remotely or balancing office work with home working.”
Regional house values boom
The Southern Highlands and Shoalhaven region in NSW was the best performing regional area, recording a 35.9% annual house value growth rate.
The Richmond – Tweed region in northern NSW was the second-best performer at 32.8%, followed by Queensland’s Sunshine Coast, which recorded an annual growth rate of 32.3%.
“The top-performing regional areas were all coastal or lifestyle markets generally within a two-hour commuting distance of a capital city,” Lawless said.
“These areas fit within the broad trend where demand has surged for lifestyle properties that offer a blend of liveability and commutability.”
Queensland’s Townsville region saw the lowest yearly growth rate for houses, increasing by just 8%.
Regional unit values rise
Regional unit markets also benefited over the past year, with 18 of the 22 regions recording at least a 10% rise in values.
The report also found that 12 regions saw unit values rise more than 20% over the year.
The best performing unit market was Queensland’s Wide Bay region, which recorded an annual growth rate of 29.2%.
The Wide Bay region was closely followed by the Sunshine Coast region, which recorded a 29.1% annual growth rate.
“If housing values across regional parts of the country continue to outpace the capitals, the obvious outcome will be that regional markets lose their affordability advantage,” Lawless said.
“We can already see this trend taking shape in some of the most popular regional coastal markets such as Byron Bay where median house values are $1.7 million and Noosa on the Sunshine Coast in Queensland, where median house values are $1.2 million, much higher than comparable capital city values.”