Residex’s latest data suggests the Australian housing market grew 1.63% during the September quarter.

“Growth was driven almost entirely by a strong surge of 1.63% in the month of September, off the back of a slight decline in August. Annual performance of Australian houses was 3.31%, as opposed to 7.2% in the previous year,” said Onthehouse Group market analyst Eliza Owen.

During the same quarter, the median non-revised unit value across Australia experienced 1.27% growth, with 1.17% growth in September alone. Overall, unit values across the country increased by 3.96%.

Owen suggests the aggregated housing market peaked two years ago, though it has since had a very slow decline relative to past growth cycles. Moreover, growth in dwelling markets was likely sustained by the four cash rate cuts implemented by the RBA since the peak of the most recent cycle.

Investors are increasingly seeking investments in regional NSW

Country homes in New South Wales had the highest value growth in the year up to September at 7.41% in capital gains. “This figure was down on the previous year’s growth of 9.94%, suggesting that regional NSW is now following the downswing in the Sydney market.”

Investment in the regional NSW market is expected to rise as those who were priced out of Sydney during the recent housing boom are seeking more affordable properties in outlying areas.

Those who are interested in purchasing property in regional areas of NSW should be advised that such areas provide higher rental yields for investors. Residex median rent estimates remained virtually unchanged in Australian houses and units. The strongest increase in rents was in ACT units, as well as Hobart and Tasmania houses, while resource market rents continued to decline.

Overall, the subdued growth in rents is likely due to an increase in investor activity, which in turn has potentially increased the stock of rental properties.