Secret areas where Aussie home prices are booming

Home prices and rental performance is booming in unexpected parts of Australia, offering home buyers surprise windfalls.

It’s not just Australia’s capital cities that are undergoing a property market rebalance.

In a convergence of suburban areas and regional towns, we’re seeing the latter experiencing performance moderations very similar to capital cities.

The value gap between the regions and the capital cities is continuing to narrow and, just like our nation’s cities, the value momentum in our regions’ hottest towns is slowing down as weaker ones increase in popularity.

The narrowing value gap has been pretty noticeable since at least September last year and has picked up since January. According to the latest research, July was the first time in nine months that our regional markets’ quarterly growth rate (1.7 per cent) didn’t outperform the capital cities (1.7 per cent).

But at the same time, regional centres still have plenty to offer buyers in performance growth, like rental increases, especially when it comes to annual uplifts.

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REGIONS OUTSHINING CAPITAL CITIES

For a start, the latest figures show a 5.9 per cent value uplift in our combined regions over 12 months, compared to a 3 per cent increase in our capital cities.

It also shows that our 50 largest regional significant urban areas (SUAs) still outshine capital cities when it comes to performance growth. The value of the SUAs was 1.5 per cent in the April quarter and 1 per cent for the combined capital cities.

According to the report, buyers in regional Western Australia are still active with Geraldton’s home values rising by 26.9 per cent over 12 months. Albany’s annual rental growth also experienced a 13 per cent uplift.

In Rockhampton in Queensland, properties are selling after just 11 days and in a positive shift for Victoria’s newly-emerging market, Shepparton and Mooroopna experienced a 30.3 per cent rise in yearly sales volumes.

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Rockhampton is booming. Photo: Chris Ison / The Morning Bulletin

This year’s interest rate cuts have also altered recent performance growth in our regional centres. The capital cities’ 1.1 per cent rise from the three months to January 31, compared to 0.5 per cent in our biggest regional areas, makes it more responsive to this year’s February interest rate cut – our first in four years.

The trend of moving from more expensive capital cities to cheaper regional areas is still popular too.

The latest figures from the Regional Australia Institute’s Regional Movers Index show average, quarterly city-to-country moves have stayed elevated at about 20.5 per cent per cent higher than in the pre-Covid era. Our city-to-country moves also outnumber country-to-city moves by 25 per cent.

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Geraldton Western Australia is also doing well. Picture: iStock

WHERE THE REGIONS ARE STRUGGLING

Even with this popularity, regional New South Wales includes some of our poorest regional performers. The Regional Market Update shows Bathurst property values only shifted by 0.3 per cent in the last quarter while Lismore’s annual sales volume is down 18.7 per cent. Homes in Bowral and Mittagong are taking 77 days to sell.

But overall, the demand for regional properties remains positive with this data presenting new opportunities for regional buyers, especially investors. But values and growth in regional centres are shifting and changing towards a new property cycle that is already increasingly apparent in our cities and suburbs.

Aerial view of Bathurst on the Central Tablelands of NSW.

I’d expect the next Regional Market Update will highlight this shift even more than their most recent reports do. Rate cuts will likely mean further shifts in our regional values and performances.

We are also on the verge of another busy Spring period so it will be interesting to see what the next few months will bring to both regional and capital city property markets.

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