Regional property price growth is on the way: CoreLogic

The regional housing markets of Australia have long been laggards when compared to the capital city markets however, the latest data shows that many of these regions have seen values rise over the past year.

Looking at data for the 50 most populous non-capital city council areas, the majority of them have seen house and unit values increase over the 12 months to May 2017.

The data indicates that after a long period of soft housing market conditions following the financial crisis, housing demand is starting to pick up across many of the larger regional areas.

Those areas that are continuing to see values fall are in many instances linked to the mining and resources sector.

Median house and unit values and 12 month value change to May 2017 in largest non-capital city council areas:

Of the non-capital city council areas analysed, the Wollongong council area is the most expensive for houses ($730,427) and units ($530,170) as well as having seen the greatest increase in house values and the fourth highest increase in unit value over the past year.

The Wollongong housing market has seen housing demand rise as demand ripples away from Sydney where affordability constraints are more pressing.

Additionally, prices are being pushed higher as more people seek out coastal and lifestyle properties.

In New South Wales in particular, regional areas of the state, particularly those reasonably close to Sydney are generally seeing strong value growth.

This is most likely linked to affordability relative to Sydney as well as Sydney home owners using the equity in their home to purchase investment properties in lifestyle markets.

The regional areas of Victoria, particularly those close to Melbourne, are experiencing value growth however, it is nowhere near the magnitude to which values are growing in those locations close to Sydney.

Although values are rising, the relatively softer growth can be linked to the fact that values have not risen as sharply in Melbourne as they have in Sydney and subsequently affordability hasn’t deteriorated as severely in Melbourne.

Queensland’s results are somewhat more mixed with the south-east corner generally seeing values rise while elsewhere growth is extremely mild or values have fallen.

In fact, the Gold and Sunshine Coasts and Noosa are seeing more rapid value growth than Brisbane is.

It seems as if a lot of demand across these regions is coming from the accelerating internal migration to Queensland and buyers from Sydney and Melbourne that have substantial equity in their homes and are looking for lifestyle properties.

Of the areas that we looked at, each of the 24 regions we highlighted in New South Wales have recorded value growth for houses over the past year.

For units, only four of the 24 regions have recorded value falls over the past 12 months.

In Victoria we highlighted 10 regional council areas in the analysis.  Of these regions analysed, two recorded value falls over the year for houses and two regions also recorded falls for unit values.

Greater Shepparton was the only council area of the state which recorded value falls for houses and units.

Of the 13 regions highlighted for Queensland, five have recorded value falls for houses over the past year and seven have recorded declines for units.

Each of the regions highlighted in Western Australia have recorded value falls over the past year for houses and units.

Launceston was the only region analysed in Tasmania and it has seen house and unit values rise over the past year.

It should be noted while values have increased they have done so at a more moderate pace than those in Hobart.

Overall it seems that housing demand in regional areas of the country is rising.

While many regions are seeing value increase, the strongest demand appears to be in those areas within relatively close proximity to capital cities, particularly those which are coastal and tap into lifestyle demand.

Cameron Kusher is head of research for CoreLogic. You can contact him here.