Red-hot regional housing market doubles capital city value growth

author-avatar By on May 18, 2021
Red-hot regional housing market doubles capital city value growth

The post-COVID exodus from major cities to the regions has seen regional house prices double the growth of the capitals.

Data from CoreLogic's quarterly Regional Market Update shows property values in Australia's 25 largest non-capital city markets surged 13.0% in the last 12 months, compared with a 6.4% gain in capital city values. 

CoreLogic research director Tim Lawless said this reflects the growing demand from Australians to escape the big smoke in favour of a tree or sea change during the pandemic.

“This can partly be explained by the new popularity of remote and flexible working arrangements, but also increased demand for lifestyle oriented properties and holiday homes," Mr Lawless said.

"No doubt the more affordable housing options across many of Australia’s regional markets is another incentive; in April there was a $247,400 difference between the median value of capital city dwellings and regional dwellings."


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you.


The report, which looks at capital growth over the 12 months to April 2021, saw Richmond-Tweed take out the top spot for capital gains across both house and unit markets, recording 21.9% and 15.5% annual growth respectively.

“Playing into the lifestyle trend, it’s no surprise to see the Richmond-Tweed area topping the list for capital gains over the past 12 months," Mr Lawless said.

"This region includes high profile beachside destinations such as Byron Bay, Suffolk Park and Lennox Heads as well as popular hinterland villages such as Bangalow.

"The median house value across the Byron council area is now $1.4 million, which is higher than Greater Sydney’s median of $1.147 million."

See also: Top 10 affordable Australian regional areas in 2021

Bunbury was the worst performer for both house and units, recording 3% and -4.4% yearly growth respectively.

Mr Lawless said house prices are likely to continue rising in regional Australia, to the detriment of locals who are being pushed out.

“Looking forward, regional housing markets remain well placed to record higher than average levels of demand, especially those markets that are located close enough to capital cities to provide a commuting option, and those lifestyle markets that are popular with sea and tree changers," he said.

“While surging values are probably good news for homeowners in these regions, for those that don’t own a home, affordability is being stretched.

"Particularly for long-time locals whose incomes are unlikely to be rising at anywhere near the pace of house price appreciation, they may be forced to seek out housing options further afield."


Photo by Stephen Tafra on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Emma Duffy joined Savings.com.au as a Finance Journalist in 2019 after spending a year as the editor of The Real Estate Conversation. She's passionate about empowering people to make smart financial decisions and improve the financial literacy of Australians by translating complex finance topics into understandable, relatable content.

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