Regional dwelling markets continue to perform strongly, taking advantage of the impacts of the COVID-19 outbreak in capital cities, according to the latest report from CoreLogic.
Of all regional markets, Tasmania’s Launceston & North East region reported the highest gains in prices in the three months to October at 10.5%, maintaining its position as top performer for a third consecutive quarter.
In terms of units, Launceston & North East lost its spot as the best market, with New South Wales’ Southern Highlands & Shoalhaven rising to the top spot with an 8.6% growth in values.
Western Australia's Bunbury region dominated the sales rankings, reporting a 24.6% growth in housing sales and a 38.7% gain in unit purchases.
Victoria's Ballarat reported the shortest days-on-market for houses at 29 days. Tasmania's Launceston and North East, on the other hand, registered the fastest selling times for units at 26 days.
Eliza Owen, head of Australian research at CoreLogic, said several factors have contributed to the continued resilience of regional property markets amid the pandemic, such as the lower density levels, cheaper purchase prices, and the normalisation of working from home.
"The results of this report support increasing levels of demand outside of cities. Regional Australia’s dwelling markets had higher rates of growth relative to capital cities through the pandemic," she said.
In fact, in the year to October, combined prices across regional dwelling markets rose by 4.8%, higher than the 3.9% price lift in capital cities.
The migration numbers from the Australian Bureau of Statistics can also indicate how the demand has shifted to regional markets, Owen said.
"This was because movements to regional Australia increased, while departures from the regions slowed. As a result, demand for dwellings in regional Australia will have risen at a time when the stock available for sale is relatively low," she said.
As mortgage rates remain low and confidence continues to manifest across property markets, there is a high likelihood for a broader-based upswing across both regional and capital city markets into the first quarter of 2021, Owen said.
However, Owen warns that the upturn in regional markets could pose a downside.
"For local first home buyers, declining affordability may become a problem. Growth may start to slow in regions that have already seen a sustained upswing, due to such affordability constraints," she said.
Areas such as Illawarra, Newcastle and Lake Macquarie, the Gold Coast, and the Sunshine Coast, are some examples of regional areas that have been reporting substantial gains in prices. In the year to October, price gains in these regions have already exceeded 7%.
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