Regional values and rents hit new record highs

Home prices and rents across regional Australian have picked up pace over the past three months, according to new data.

CoreLogic’s Regional Market Update found dwelling values across regional Australia rose 2.1 per cent in the three months to April 2024, the fastest quarterly growth rate in almost two years, outperforming capital city values, which rose 1.7 per cent in the same period.

CoreLogic Australia Economist, Kaytlin Ezzy, said the recent capital growth saw the combined regions record a nominal recovery in March and, subsequently, a new record high in April.

“After falling 5.8 per cent between May 2022 and January 2023, regional home values have seen a slower recovery compared to capital city values but have now regained the losses from the downturn to reach a new record high,” Ms Ezzy said.

Western Australia recorded some of the best-performing regional markets, particularly along its coastline. 

Geraldton had the largest gains over the past three months, up 8.8 per cent, followed by Busselton (7.7 per cent) and Bunbury (6.4 per cent). 

Bunbury had the largest growth over the past year, up 20.7 per cent, and the fastest selling time of just 14 days.

Albany had the smallest vendor discounting at -2.8 per cent.

Queensland saw the highest number of top-performing locations followed by NSW, South Australia and Tasmania, each with one market in the top 10.

“The diversity in economic activity across these parts of regional WA and Queensland including agriculture, tourism, ports and mining would be contributing to the strength of these markets, along with their higher levels of interstate migration, relative affordability and low supply levels,” Ms Ezzy said.

The worst-performing regional markets were in Victoria and NSW, with Ballarat and Port Macquarie both down 2 per cent over the past three months. 

Ballarat also had the weakest annual change, down 4.2 per cent.

Markets in the Southern Highlands & Shoalhaven and capital regions of NSW had some of the worst selling conditions, with Batemans Bay offering the highest vendor discounts at 6.5 per cent and Bowral Mittagong recording the highest median time on market at 75 days.

Rents re-accelerate across the regions

Annual rental growth across Regional Australia continued to accelerate, with rents rising 6.3 per cent over the 12 months to April, up from 4.9 per cent over the year to January. 

By comparison, annual rental growth across the combined capitals eased from 9.6 per cent to 9.4 per cent.

Across the 50 largest non-capital locations 37 markets have rents at a record high, with almost all recording rent increases over the past three months (47 markets) and past year (48).

After recording rental declines throughout 2023, Batemans Bay saw the largest quarterly increase in rents, up 6 per cent, or $32 per week, over the three months to April, followed by Bunbury (4.7 per cent) and the Sunshine Coast (4.4 per cent). 

Bunbury had the largest annual rental growth, up 16.4 per cent, while Kalgoorlie – Boulder had the highest gross rental yield at 9.4 per cent.

Tasmania’s Burnie – Somerset was the most affordable rental market at $419 per week, while the Gold Coast – Tweed Heads border region was the most expensive rental market at $827.

Just three locations recorded a quarterly decline in rental values, Nowra – Bomaderry (-0.3 per cent), Maryborough (-0.2 per cent) and St-Georges Basin – Sanctuary Point (-0.1 per cent), while Batemans Bay and Goulburn were the only others to record an annual fall in rents (-2.4 per cent and -0.1 per cent respectively).

“Housing affordability has continued to deteriorate through the start of 2024 for tenants and prospective home buyers alike,” Ms Ezzy said.

“The outlook for regional housing markets will heavily depend on demographic trends, housing supply, localised economic drivers and the outlook for interest rates.”

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