Regional house prices rise at fastest annual pace in 35 years: REA Group

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on November 25, 2021 Fact Checked
Regional house prices rise at fastest annual pace in 35 years: REA Group

Many city dwellers sought a tree or sea change due to COVID, which has caused regional house prices to skyrocket - particularly in Queensland.

Over the past year to September, regional house prices have jumped by almost 30% - meaning they have outpaced house price growth in regional areas - according to REA Group's PropTrack Regional Australia Report 2021.

The rise of 'city skippers' has led to record-low regional housing stock and 'tight' competition, driving house prices through the roof.

Specifically, houses are going for more than 10% their original asking price in Newcastle NSW; Lake Macquarie NSW; South East SA; Launceston TAS; North East TAS; and Geelong VIC.

But Queensland is raking in the most 'city skippers' of all, as the Sunshine Coast and Gold Coast garner the most searches on realestate.com.au over the past year.

Additionally, these spots are among the most in-demand areas for buyers - spots on the Queensland's coasts have risen by up to 54%, and experts predict the boom isn't yet over.

Most (74%) of these Queensland buyers searching on realestate.com.au came from NSW and Victoria as locals sought to avoid lockdowns according to REA Group.

This is backed by recent ABS migration data, which revealed that Brisbane gained 3,330 people over the last quarter, while Melbourne and Sydney lost 8,300 and 8,200 respectively. 

Eleanor Creagh, PropTrack Senior Economist and report author, said the pandemic saw people wanting more space, larger homes, and a change in lifestyle. 

"It appears that many 'city skippers' have sought out regions that remain on the outskirts of metropolitan areas, within a one to two hour commuting distance of major capitals," Ms Creagh said.

"These commutable regions are seeing strong price growth, with new homebuyers taking advantage of both the ability to maintain office connections one or two days a week and the amenities provided by the regional lifestyle."

She said it's 'unsurprising' that Queensland has topped the list of most sought-after regional locations for a second year in a row.

"With the delta variant keeping south-east mainland capitals under lock and key for the latter half of 2021, and regional and interstate migration trending above long-run averages, the regions have seen record price growth this year," Ms Creagh said.

"Housing values in regional Australia are currently rising at the fastest annual pace in at least 35 years, outpacing the already strong growth in metro areas.

Ms Creagh said the question now is whether this regional migration is a 'flash in a pan' or a lasting trend.

"The migration shift from metro to regional areas may remain high for some time, but begin falling back towards the long-run average as people begin to return to normal life," she said.

"Price growth in the regions is therefore likely to continue, but moderate from current levels. Already the pace of price growth is slowing across the broad market and we expect that to continue with the peak of the current cycle now behind us."


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Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Rachel is a Finance Journalist, and joined Savings in 2021. Coming from a background in the FinTech space, her interests include the innovation of lending technology, property, investing, and more. With a passion for educating and informing people about their finances, she hopes to increase the financial literacy of everyday Australians.

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