Property value growth in Regional property stronger than Capital Cities

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CoreLogic’s quarterly Regional Market Update looks at capital growth over the 12 months to April 2021 in Australia’s 25 largest non-capital city markets with property value growth in Regional property stronger than Capital Cities over the past 12 months, rising 13% compared with a 6.4% gain in capital city values.

It found the Richmond-Tweed region of northern NSW took the top spot for capital gains across both house and unit markets, with 21.9 per cent and 15.5 per cent annual growth respectively.

Conversely, Bunbury, in Western Australia, was the worst performer across both house and unit markets, with 3 per cent and -4.4 per cent annual growth respectively.

CoreLogic Research Director Tim Lawless said the overall faster pace of growth reflected stronger demand flowing into the regional areas of the country since the onset of COVID.

“This can partly be explained by the new popularity of remote and flexible working arrangements, but also increased demand for lifestyle-oriented properties and holiday homes,” Mr Lawless said.

He added that the comparative affordability of regional markets was “no doubt another incentive”.

“In April, there was a $247,400 difference between the median value of capital city dwellings and regional dwellings,” he said.

“Playing into the lifestyle trend, it’s no surprise to see the Richmond-Tweed area topping the list for capital gains over the past 12 months.

“This region includes high-profile beachside destinations such as Byron Bay, Suffolk Park and Lennox Heads as well as popular hinterland villages such as Bangalow.”

Mr Lawless said the median house value across the Byron council area was $1.4 million, which is higher than Greater Sydney’s median of $1.147 million.

“Looking forward, regional housing markets remain well placed to record higher than average levels of demand,” he said.

“Especially those markets that are located close enough to capital cities to provide a commuting option, and those lifestyle markets that are popular with sea and tree changers.“

Mr Lawless noted that although surging values spelled good news for homeowners it also meant affordability was being stretched for those trying to enter the market.

“Particularly for long-time locals whose incomes are unlikely to be rising at anywhere near the pace of house price appreciation, they may be forced to seek out housing options further afield.”