- Regional Australia home values eased 0.1% in the June quarter
- It's a modest decline compared to the 2.5% fall across combined capital cities
- The national housing downturn has spread with 47 out of 50 major regional centres recording weaker growth in home values
Home values in regional Australia eased 0.1% in the three months to July compared to a 2.5% decline across the combined capital cities.
The latest Cotality Regional Market Update identified a broad slowdown that's seen value growth slow or decline in almost every major regional market.
Compared to the previous quarter, 47 of Australia's 50 largest regional areas recorded slower growth while 22 recorded a drop in home values.
Cotality head of research Gerard Burg said while regional markets continue to outperform the capitals, the latest data shows they are not immune to the broader housing market slowdown.
"Regional markets have consistently outperformed the capital cities since housing conditions began to soften in late 2025, but even the regional markets are now being impacted by the broader market slowdown," he said.
Downturn goes regional
Regional markets had been buoyed by their relative affordability, luring buyers priced out of capital city markets.
"[But] softer buyer demand is becoming more evident across the country with fewer markets recording the strong growth seen earlier this year," Mr Burg said.
He said Australia's housing downturn first emerged in Sydney and Melbourne as high interest rates and affordability constraints weighed on buyer demand.
Weakened consumer confidence and an investor retreat from the market after the May federal budget fuelled the broader slowdown across the country.
See also:
- Big four banks reveal mortgage collapse
- Housing slump spreads as Brisbane and Adelaide join the slide
- Housing profitability shows first signs of slide
WA and SA continue to lead
But not all regional markets are going backwards, with regional Western Australia and South Australia recording the strongest quarterly growth nationally at 2.1%.
Port Pirie led South Australia with 6.7% quarterly growth while Kalgoorlie-Boulder was the strongest performing WA market at 6.4%.
The update found previously high-performing south-west regions of WA had started to ease as the state's strongest growth became increasingly concentrated in more affordable regional centres.
"We're no longer seeing growth concentrated in the lifestyle markets that benefited from spillover demand we saw during the market's upswing," Mr Burg said.
"Instead, buyers are gravitating towards regional centres where their dollar stretches further and local demand is supporting housing values."
QLD flat as affordability bites
Dwelling values were flat in regional Queensland over the quarter as values fell across the state's south-east markets for the first time since 2023.
The Gold Coast (-0.8%), Sunshine Coast (-0.5%), and the far north market of Cairns (-0.6%) pulled back gains in Maryborough (+2%), Gladstone (+1.6%), and Townsville (+1.2%).
Queensland's market had been one of Australia's standout regional performers over the past few years.
"[Now] we're starting to see a more selective market emerge," Mr Burg said.
"As higher-value markets lose momentum and buyers become more cautious, we're seeing demand swing to more relatively affordable regional centres."
NSW, Vic weakest performing
Regional New South Wales and Victoria continued to record the weakest conditions nationally with Coffs Harbour (-3.3%), Goulburn (-3.2%), and Nelson Bay (-3%) leading the declines in NSW.
At the same time, inland markets including Dubbo (+3.9%), Tamworth (+2.2%), and Albury-Wodonga (+2%) continued to record relatively strong growth.
In Victoria, Geelong (-1.2%) and Warragul-Drouin (-1.5%) recorded the biggest falls.
In terms of time on market, NSW recorded the longest median time on market with WA the fastest-selling regional market.
Rental growth in the regions also eased back to 1.1% nationally over the quarter, down from 1.8% the previous quarter.
That compares to 1.2% rental growth recorded in the capital cities.
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