According to the latest Regional Market Update from CoreLogic, the housing markets in regional areas of Australia are displaying resilience. In fact, regional property values experienced a 1% increase over the three months leading up to January, outperforming the -0.7% decline in capital city values.
While growth in regional markets has stabilized, there are indications of a slowdown in certain areas. Western Australia and Queensland led the way in terms of value gains among the country’s largest 50 regional significant urban areas. Geraldton, Albany, Mackay, Townsville, and Gladstone saw the strongest growth during the quarter.
However, the data also revealed that momentum is slowing in several of these markets, including most of the Queensland markets and a majority of the Western Australian markets. For example, Gladstone experienced a significant drop in its quarterly growth rate compared to July 2024, while Geraldton’s three-month growth rate declined from its peak in August.
Kaytlin Ezzy, economist and report author at CoreLogic, explained that this moderation in growth is likely to continue due to affordability concerns dampening demand. She noted that the Queensland and Western Australia markets, which have been driving regional growth for over a year, are now losing steam. Despite the slowdown, these historically affordable mining markets and coastal markets have still seen significant growth over the past year.
On the other hand, some regional markets are showing revitalized strength. Bathurst in New South Wales experienced a notable change in direction, shifting from a decline in October to a rise in January. Taree, Warragul-Drouin, and Ballarat also showed signs of stabilization or modest growth. Ballina was marked as the weakest performer over the quarter, while Ballarat saw the largest annual drop in values.
Ezzy highlighted that regional Victoria and southern parts of NSW were among the worst market performers in 2024. However, she noted that they have gained an affordability advantage over that time, and there are signs of potential improvement in these markets.
In January, regional markets showed renewed momentum with a 1.6% increase in rents over the quarter, compared to a 0.3% rise in capital cities. While this increase is largely seasonal, the broader annual trend in rental growth has moderated at 5.9%. Busselton recorded the highest quarterly rental growth, while Geraldton led in terms of annual performance.
Ezzy also mentioned that regional vacancy rates remain tight at 1.9%, slightly lower than a year ago. Warrnambool had the lowest vacancy rate, while Dubbo and Bowral-Mittagong had the highest.
Overall, the regional housing markets in Australia continue to show resilience, with some areas experiencing growth while others face a slowdown. The moderation in growth is expected to continue due to affordability concerns, but there are signs of improvement in certain regions.
1 Comment
Esq
February 20, 2025This fascinating blog post provides valuable insights into the financial landscapes of Capital City Growth, Queensland, and Western Australia. I was particularly surprised to learn about the specific factors that contribute to their growth. It would be interesting to explore how these findings compare to other regions in Australia.