Regional home value growth has slowed in recent months but has continued to outpace the capital cities due to chronically low listings and sustained buyer demand, according to CoreLogic.
The rate of home value growth across Australia’s 25 largest non-capital city regions was 4.7% during the three months to April 2022, down from a peak of 6.6% during the same period last year.
Housing values across the combined regions jumped 23.9% in the year to April 2022, outpacing the combined capital city dwelling growth rate of 14.6% for the same period.
“Although demographic data is significantly lagged, anecdotally we are still seeing strong demand for regional housing supported by high internal migration rates,” CoreLogic Research Director Tim Lawless said.
“The high level of demand is supported by estimates of home sales, which were tracking 20.1% above the previous five-year average over the three months ending April 2022.
“It seems many employers across the relevant industries have implemented permanent hybrid working arrangements for staff which is likely to be supporting the stronger demand trend across regional Australia.”
Hunter Valley, excluding Newcastle, was the best performing non-capital house market, with an annual growth rate of 34.3%, overtaking Southern Highlands and Shoalhaven with 33.3%.
The largest change in sales volumes was recorded in the Central Queensland region and the New England and North West region, which both recorded a 42.9% increase in house sales over the year to February 2022.
At the other end of the scale, Victoria’s Latrobe – Gippsland region recorded 2.4%, the lowest change in house sales over the year to February 2022.
As interest rates move higher and affordability pressure mount, Lawless said the outlook was softening to more sustainable levels for non-capital regional markets.
“Arguably some regional markets will be somewhat insulated from a material downturn in housing values due to an ongoing imbalance between supply and demand,” Lawless said.
“We are continuing to see advertised stock levels remain extraordinarily low across regional Australia and settled sales activity looks to be holding firmer relative to the capitals.
“A lot will depend on regional migration patterns and we expect the demographic trends to continue favouring regional housing markets, especially those regions with some lifestyle appeal within a few hours’ drive of the major capitals.”