Rents in regional areas have grown at a pace three times faster than rent in capital cities, recent data has revealed.
Not only have regional house price growth more than doubled capital city prices in the year to April 2021, but regional rents rose at 9.6 per cent compared to capital city rents at 3.3 per cent during this period, CoreLogic’s latest Quarterly Regional Report found.
“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,” said CoreLogic research director Tim Lawless.
The relative affordability of homes in regional markets have also pushed up demand, he added, with a $247,000 difference between the median value of regional and capital city homes.
House prices in regional NSW’s Richmond-Tweed area, located south west of Byron Bay, skyrocketed 21.9 per cent in the 12 months to April, taking the crown of the best-performing regional market.
The area has been popular for its proximity to beachside locations such as Byron Bay, Suffolk Park and Lennox Heads, as well as hinterland village Bangalow.
In fact, the median house price of the Byron area – $1.4 million – has now outpaced that of Greater Sydney, at $1.147 million, Lawless said.
Regional prices will keep rising… But so will affordability concerns
Regional markets will continue to rise faster than capital city markets as these locations are within commuting distance of capital cities and also popular with those seeking a sea or tree change.
However, tighter property and rental markets have also led to concerns about housing affordability, homelessness and housing stress.
“While surging values are probably good news for homeowners in these regions, for those that don’t own a home, affordability is being stretched,” said Lawless.
“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.”
Australian Housing and Urban Research Institute managing director Michael Fotheringham has described the demand for regional properties as a “regional version of gentrification”.
“The locals all of a sudden find it’s a changing place and it’s not as affordable as it has been in a range of ways," he said.
Record-low interest rates have also led to a surge of first-home buyers in the property market as commentators observe a climate of ‘FOMO’ – fear of missing out.