Regional markets still outperforming capital cities

The appeal of regional markets among homebuyers seemed to have worn off since lending conditions tightened and consumer sentiment fell but they continued to perform well, holding up better compared to capital cities.

According to PropTrack Regional Australia Report 2022, prices have softened in regional markets, declining 2.2% since their peak in April 2022.

The number of potential buyers per listing in the regions also declined, down 22% from the peak in January 2022. However, it remains close to three times the pre-pandemic levels and is stronger relative to capital cities.

The softer fall in regional home prices was due to the limited supply of properties, which are actually down 37% from the pre-pandemic level.

PropTrack senior economist Eleanor Creagh said the pandemic, which resulted in lockdowns and travel restrictions, has led to many people reassessing their wants and needs in terms of housing.

“Housing markets in regional Australia thrived as people sought more space and more affordable homes — remote working opportunities and preference shifts drove strong population growth in regional areas at the expense of the capitals, predominantly Sydney and Melbourne,” she said.

The shifting lifestyle priorities and emerging migration trends are likely to provide a buoy for regional property markets, allowing it to exhibit a slower pace of price falls compared to their capital city counterparts.

“In addition, conditions remain tougher for regional buyers, with the number of properties listed for sale still well below pre-pandemic levels, which is also seeing some markets remain more competitive and shielding home values.”

The PropTrack Regional Australia Report 2022 also unveiled the following findings:

• Higher value regional areas are seeing steeper price falls, while values in affordable areas are holding up.
• The share of property sales below their original list price increased to 49% in October, the highest since the same month in 2020.
• The regional markets in Queensland, South Australia, and Western Australia continued to see higher demand compared to the regional markets of New South Wales and Victoria.
• The top location for interstate property seekers in regional Australia is Regional Queensland — a third of all searches for this region are from interstate buyers.
• The median number of days in regions hit 50 days in October, slower than last year’s record low of 29 days.

Highest growth suburbs in the regions

The report showed the top suburbs which reported the highest annual gains in median property prices over the year to October.

Interestingly, six of the 10 regional house markets are in NSW, with Darling Point reporting the biggest gain of 60%.

Looking at the unit market, seven of the 10 top markets are in Queensland. Molendinar is the top market, with an annual median unit growth of 48%.

—

Photo by Max Böttinger on Unsplash.