Regional property values continue to outpace their capital city counterparts

  • Three-quarters of suburbs (72.6%) across regional Australia saw an increase in dwelling values over the quarter
  • In contrast, almost half (48.6%) of capital city suburbs reported quarterly falls
  • Three in four suburbs across Sydney saw a decline in value over the three months to January, while nine out of ten suburbs in Melbourne recorded quarterly declines

Regional property values continue to outpace their capital city counterparts, demonstrating “remarkable resilience” in a challenging market, according to CoreLogic’s Housing Chart Pack for February.

The latest data shows capital city values have dipped into negative territory, down -0.7%, compared to the 1.0% growth seen in the regions over the rolling quarter.

Drilling down further, almost three-quarters of regional suburbs analysed (72.6%) saw an increase in dwelling values over the three months to January, up from just 66.2% in the September quarter.

Over the same time, the portion of capital city suburbs recording declines has increased, from around 30% (31.3%) in September to almost half (48.6%) in January.

CoreLogic Economist Kaytlin Ezzy said these mixed results could be attributed to improved relative affordability across the regions, an increase in listing levels across the capitals, and a second wind in regional internal migration.

“After underperforming the capitals through much of 2023, the regions have regained much of the affordability advantage, with the capital city premium widening by around $50,000 over the past two years to around $240,000 in January.”

“With demand skewing towards the more affordable end of the market, it’s not surprising to see value growth shift away from the capitals, towards the regions, as cash-strapped buyers look further afield for more affordable markets.

The regions have also benefited from both an elevated flow of capital city residents moving to the regions, along with a reduction in the number of people leaving the regions for the capitals.

“We’re almost five years on from the onset of COVID and it appears that remote and hybrid working arrangements are here to stay. With more people able to prioritise lifestyle over job location, the flow of internal migrants to regional markets has settled higher than the levels seen pre-COVID, helping to support housing demand.”

 

Adapted from Core Logic newsletter