Yahoo Finance Regional property prices take a dive: ‘Swift and significant’
Property prices are dropping in Australia’s hottest regional areas, as interest rates continue to rise.
Aussies flocked to regional areas during COVID, but it appears that “love affair” may have run its course.
CoreLogic’s latest Regional Market Update found regional property prices were dropping, as vendor discounts climbed and days on the market rose.
Out of Australia’s 25 largest regional markets, only 13 recorded a rise in house values over the year to January 2023, down from 21 over the year to October.
Richmond-Tweed in New South Wales - which includes areas like Byron, Ballina and Tweed Heads - recorded the worst performance, with house prices dropping 18.6 per cent over the year. It also recorded the largest drop in sales volumes, the longest days on the market and the highest vendor discounts.
CoreLogic head of research Eliza Owen said it was unsurprising the region recorded the biggest decline.
“This was the region where values skyrocketed, with houses increasing more than 50 per cent during COVID, taking the median house value to more than $1.1 million,” Owen said.
“Since then, much has changed, with borders reopening, outbound travel returning, workers returning to the office, not to mention the overlay of nine rate rises. It’s been a swift and significant shift.”
The Illawarra region recorded the second-worst performance, with house values dropping 12.6 per cent, following a 44 per cent upswing.
Bright spots
There were some regional locations that bucked the trend. The South East region in South Australia - which includes areas such as Kangaroo Island, the Fleurieu Peninsula and the Limestone Coast - was the best-performing regional housing market, with an annual growth of 15.7 per cent.
The NSW regions of New England, North West and Riverina followed close behind, with values up 11.5 per cent and 10.1 per cent respectively.
But, with further interest rate hikes on the horizon, Owen said there was a good chance housing values would continue to drop and regional areas would not be immune to the downturn.
“This is a trend we can expect to see playing out at least until interest rates top out,” Owen said.
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