Aussies who took the pandemic as an opportunity to dip their toes into the regional property market may be regretting their decision now as prices slide.
The COVID-19-induced boom for regional housing has burst, according to new data from Corelogic.
Corelogic’s Regional Market Update report found the regional markets which had the strongest growth during the upswing were now leading the declines.
The report found house values in six of the most popular lifestyle markets recorded falls of 6 per cent or more last quarter.
These included Richmond-Tweed (down 11.7 per cent), Southern Highlands and Shoalhaven (down 7.1 per cent), Sunshine Coast (down 7.1 per cent), Gold Coast (down 6.4 per cent), Illawarra (down 6.1 per cent) and Newcastle and Lake Macquarie (down 6 per cent).
All markets analysed recorded a quarterly decline in house values, with the exception of Central Queensland (up 0.1 per cent), SA’s South East (no change) and WA’s Bunbury (no change).
Regional NSW dominated the worst-performing house markets. Southern Highlands and Shoalhaven recorded the largest decline in sales volumes (down 27.5 per cent) and the highest vendor discounting rate (down 4.9 per cent), while the New England and North West region clocked up the longest time on market at 43 days.
CoreLogic economist Kaytlin Ezzy said price drops initially seen across the more expensive capital city and regional markets had become more broad-based over the three months to October, with 87.8 per cent of the regional house and unit markets analysed recording a quarterly decline in values.
“Consecutive interest rate rises, persistently high inflation, and waning consumer sentiment saw the pace of value declines accelerate across regional Australian property markets,” Ezzy said.
“It is unsurprising the Richmond-Tweed region recorded the strongest decline in house values. Throughout the COVID period, values skyrocketed, rising more than 50 per cent and taking the median house value to more than $1.1 million.
“However the impact of this year’s floods, coupled with seven consecutive rate rises, has seen house values fall in the region by nearly 16 per cent since April.”
The best-performing regional house market was SA’s South East, where values were 21.7 per cent higher over the past year, followed by the Riverina (20.5 per cent), and New England and North West (19.8 per cent).
Ezzy said the outlook for Australia's regional markets remained skewed to the negative, with values expected to continue declining while interest rates were rising.
“The lack of a typical spring listings surge is positive, in that we are yet to see material signs of a rise in distressed listings,” Ezzy said.