Yahoo Finance The regional areas where property prices are falling the most
COVID-19 lockdowns fuelled record-breaking price rises in many regional areas, but now the tide is starting to change.
NSW and Queensland’s beach and country hot spots have been the first to register a quarterly fall in house values, according to new research from CoreLogic.
The latest quarterly Regional Market Update examined growth conditions across Australia’s largest non-capital city regions, showing the largest 25 non-capital city regions all recorded an increase in house values for the year.
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NSW’s Riverina region was the best performer among regional house markets, with an annual increase of 27.8 per cent.
This was followed by Wide Bay (QLD) and New England and North West (NSW), up 26.8 per cent and 26.4 per cent respectively.
The lowest yearly growth rate was recorded across Ballarat in Victoria (7.4 per cent), followed by Bunbury in Western Australia (9.5 per cent).
But, despite the widespread capital gains in regional house values, 10 regions recorded value declines in the three months to July.
CoreLogic economist Kaytlin Ezzy said a number of the regional areas that previously saw some of the strongest growth over the COVID period were now showing weaker selling conditions.
The largest quarterly falls in house values occurred in:
Richmond-Tweed region - down 4.5 per cent
Illawarra - down 3.5 per cent
Southern Highlands and Shoalhaven - down 3 per cent
“Typically, markets with a higher median value tend to lead the broader market when shifting through different cycles,” Ezzy said.
“After recording some of the strongest value growth throughout the COVID period, each of these areas now have a median house value in excess of $1 million.
“As we move further into the downward phase of the cycle we would expect to see this decline in values to spread into more regional areas.”
What to expect from regional markets going forward
As interest rates move higher and affordability pressures mount, Ezzy said it was likely the decline in values witnessed in capital cities would become more widespread and impact regional areas.
“Value declines are already being seen across more expensive regional markets, while the pace of growth has eased considerably across the combined regions’ broad middle- and lower-quartile markets,” she said.
“However, as Australia’s housing market moves further into the downwards phase of the cycle, it’s possible the regional areas will be slightly more insulated than the capitals, thanks to these markets’ relative affordability and low advertised supply levels.
“Additionally, the strong growth that’s occurred over the past two years should help cushion regional homeowners from the most extreme effects of the cycle's downturn.”
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