Regional house prices in Australia starting to increase, latest data shows
Most major regional areas in Australia now seeing an increase in home values as demand for housing in the regions is picking up after a number of years of being in the doldrums, the latest figures suggests.
Illawarra recently recorded its largest annual increase in values for houses at 14.3%, and units at 13.9%, according to the CoreLogic Regional Market Report which provides an analysis on the performance of Australia’s largest council areas.
While the Illawarra region recorded the largest annual increase in values for both houses and units, CoreLogic research analyst Cameron Kusher said that given that the Illawarra is close to Sydney, the result for the regional is likely to be contributing to its strength with some buyers priced out of the Sydney market now looking to this region.
In contrast, the only regional market to record a fall in values, was Townsville where houses dropped by 4.5% and unit values fell by 3.7%. Unit values were also lower across the regions of Wide Bay with a fall of 1.2% and in Bunbury they were down by 6%.
In New South Wales the regions of Newcastle and Lake Macquarie and the Richmond-Tweed regions saw home values rise by less than 10% compared to stronger levels of growth in the Illawarra region. Transaction activity was lower over the year in two out of the three regions, with Richmond–Tweed showing a year on year growth in sales activity.
In Queensland, the two leading lifestyle markets of the Gold Coast and Sunshine Coast were the strongest performing regions across the state over the period, with an increase for both house and unit values.
Transaction activity results were mixed with sales volumes across the Gold Coast remaining steady over the year. However, these were well above the five year average, the data also shows.
Indeed, both the Gold Coast and Sunshine Coast are recording annual rates of growth similar to that in Brisbane indicating rising demand for homes across the South-East Queensland region. However, across the Sunshine Coast, volumes fell over the 12 month period. Townsville, Wide Bay and Cairns followed with median values remaining relatively flat, or falling.
In Victoria, sales activity in Geelong and Latrobe–Gippsland dropped by 2% over the year, however median values and rental rates increased over the year. Geelong recorded the strongest performance with house values rising by 5.6% and unit values up 3.4%, while across the rental market, advertised rental rates were up 3% and 3.6% respectively.
In Western Australia, the Bunbury region recorded mixed performance over the year. House values rose by 3% but unit values fell by 6%. Overall, market conditions in Bunbury remained fairly weak over the period and the data shows that 14.3% fewer homes sold over the year to June 2016 when compared to June 2015.
‘Our latest data points to an increase of value growth in regional markets, particularly those which are located adjacent to capital cities. As people are priced out of certain capital cities, buyers now appear to be looking to these adjacent regions,’ said Kusher.
‘Home owners in Sydney and Melbourne have seen a substantial rise in housing equity over recent years. Subsequently we are seeing some evidence that these buyers are starting to look for holiday and investment properties in certain regional markets which is also providing an impetus for some of the value growth we are currently seeing,’ he added.
