New South Wales’ Illawarra region was Australia’s strongest regional house market in the year to July 2020, new analysis has revealed.
The region, located to the south of Sydney saw sales volumes tick up 14.0 per cent for houses and median value growth soar 12.0 per cent to a median value of $704,498, according to CoreLogic’s regional price report.
But when it comes to units, Launceston and North East Tasmania saw a huge yearly growth of 14.8 per cent in value to a median value of $266,604. The average unit in this region only needs 26 days on the market for a sale.
And on the other end of the spectrum, Western Australia’s Bunbury saw the worst value fall for houses, with prices down 6.3 per cent to $380,340. And Victoria’s Hume saw units discounted the most, down 11.1 per cent to $234,546.
What’s going on in regional markets?
CoreLogic head of research Tim Lawless said regional markets have generally held the line during the Covid-19 crisis and have weathered the storm better than capital city markets.
Across regional Australia, values slipped 0.1 per cent during the pandemic while capital city values fell 2.0 per cent.
“While the region by region data shows diversity, the relatively steady conditions across the regional markets of Australia can probably be attributed to factors such as less impact on housing demand from stalling overseas migration; close to 85 per cent of Australia’s net overseas migration flows into the capital cities,” Lawless said.
“Also there likely remains some momentum in the trend towards rising demand for lifestyle properties that was prevalent prior to Covid-19.”
Lawless said that regional markets are generally more affordable with population densities also lower - an unexpected perk during a global pandemic. Then there is the lifestyle value: life by the sea is undeniably enjoyable.
But regional markets also tend to be more volatile, particularly if they are dependent on one particular industry. Regional markets also may not have the same infrastructure and access to services seen in capital cities or regional hubs.
Of the 50 house and unit markets analysed, 37 saw values rise over the year to July with houses more likely to increase in value.
Property expert and Suburbanite founder Anna Porter said Covid-19 is forcing Australians out of the city and into regional areas thanks to the lure of cheaper rent and mortgages.
She compared south Sydney hotspot Cronulla, where the median rent is around $850 a week to the South Coast’s Nowra, where it’s $370.
“If someone has lost their job or had their hours reduced too much, the Government benefits just may not be enough to sustain a Sydney or Melbourne lifestyle,” Porter said.
“Many Sydneysiders are now looking to the country for an early tree change.”
She said that employment has been the big factor that has changed: if you’re going without a full time or well-paid job, capital city living just isn’t feasible anymore.
Then there’s the fact that remote working means workers can technically work from anywhere now. And there’s a big benefit to local economies, she added.
“[This regional migration is] something regional Australia could really do with as they will no doubt be feeling the economic impact of reduced tourism, and drought, floods and fires are still very much part of our regional landscape with many communities still trying to recover from these disasters of late,” she said.
“So, a boost to economic spend and some underpinning to the property market won’t hurt at all.”