Australia’s regional housing markets have remained strong, with property values rising by 1.0% in the last three months, while capital city values dropped by 0.7%, according to CoreLogic.
Where Are Prices Rising?
Western Australia and Queensland saw the biggest increases, with Geraldton (6.3%), Albany (5.9%), Mackay (5.7%), Townsville (5.1%), and Gladstone (4.3%) leading the way. However, growth in many of these areas is slowing down compared to last year.
Signs of a Slowdown
1. Gladstone’s growth rate has dropped from 9.9% in July 2024 to 4.3% now.
2. Geraldton’s growth has also slowed by 2.6 percentage points since August.
3. 28 markets have seen a slowdown, including most in Queensland and Western Australia.
According to CoreLogic economist Kaytlin Ezzy, affordability concerns may reduce demand, causing growth to continue slowing.
Some Areas Are Bouncing Back
While some regional markets are cooling, others are recovering. Bathurst in NSW saw a big turnaround, shifting from a 1.8% decline in October to a 4.2% increase in January. Other areas like Taree, Warragul-Drouin, and Ballarat are also showing signs of stabilizing.
Southern NSW and regional Victoria, which struggled in 2024, may now have an affordability advantage, potentially driving future growth.
Rental Market Continues to Slow Despite Seasonal Uptick
Regional rental markets gained momentum in January, with rents rising 1.6% over the quarter, compared to a 0.3% increase in capital cities.
While this is up from a recent low of 0.4% in Q3 2024, the increase is mostly due to seasonal trends. The broader trend suggests rental growth is still slowing.
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Busselton recorded the highest quarterly rental growth at 4.6%.
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Geraldton had the strongest annual rental increase, rising 13.8%, adding $64 per week to median rents.
Vacancy rates remain tight, with regional vacancy rates at 1.9%, slightly down from 2.0% a year ago.
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Tightest rental market: Warrnambool (0.3% vacancy rate).
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Highest availability: Dubbo (3.9%) and Bowral-Mittagong (3.3%).
While regional property markets have been strong, the rapid growth seen in some areas is slowing. However, other regions that struggled in 2024 may be on the path to recovery. Meanwhile, rental prices are rising in some areas, but the overall trend suggests a gradual slowdown.
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Australia’s regional housing markets have remained strong, with property values rising by 1.0% in the last three months, while capital city values dropped by 0.7%, according to CoreLogic.
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