Investors flock to regions as values reach 3-year high
By
Photo by Rachel Claire
In a remarkable shift, regional dwelling values across Australia have surged to their highest growth rate in three years, with Western Australia (WA) leading the charge. According to Cotality’s November Regional Market Update, which analysed the country’s 50 largest non-capital city significant urban areas (SUAs), regional properties have seen a 2.4 per cent rise over the three months leading up to the end of October, marking the most significant increase since 2022.
The surge in regional property values is largely attributed to affordability and supply constraints in capital cities, driving buyers to explore opportunities in regional areas. Cotality Australia economist Kaytlin Ezzy highlighted the widespread momentum, noting that growth isn’t confined to a single region or price bracket. “Just like the capitals, buyers have become increasingly active across regional areas, with improved borrowing capacity coming up against constrained stock, helping to push values higher,” Ezzy explained.
Western Australia stands out as a key driver in this regional property boom. The state’s far south-west market has dominated many indicators of growth, with Kalgoorlie-Boulder, located northeast of Perth, recording an impressive 8.1 per cent increase in dwelling values over the three months to October. Geraldton, in WA’s mid-west, saw a 7.4 per cent rise, while Albany’s dwelling values grew by 6.2 per cent during the same period.
Albany has not only performed well quarterly but also recorded the largest annual increase among the top 50 regional SUAs, with a 23.3 per cent rise. Jeremy Stewart, managing director of Merrifield Real Estate in Albany, described the market as tight, with low supply and high demand. “When there is supply hitting the market, there are either buyers that have already purchased it from databases or there’s a lot of interest across all sectors,” he told REB.
Stewart noted that the demand is particularly strong for residential properties priced below $700,000, attracting between 30 to 50 enquiries quickly. He also observed significant interest in the $700,000-$900,000 bracket, especially in the suburban market. “Probably 65 per cent of the demand across the market is coming from the outer Albany region – that’s made up predominantly of Perth people, relocating investors from the east coast,” Stewart added.
Albany also boasts the shortest median time on the market among all regional areas nationwide, with properties selling in just 11 days and a median vendor discount rate of 2.0 per cent over the year. WA’s Busselton is another standout, with properties typically selling in 14 days. In contrast, regional New South Wales (NSW) lagged, with the Bowral-Mittagong region taking the titles for lowest annual growth, longest days on market, and highest vendor discounts across all 50 regions.
The Bowral-Mittagong market, located in the NSW Southern Highlands, experienced a 1.2 per cent fall in annual dwelling values, with properties spending an average of 77 days on the market and a vendor discounting rate of 5.4 per cent. This region was also one of the few in NSW to record a quarterly decline, with a 1.1 per cent drop, alongside St Georges Basin-Sanctuary Point (-1.2 per cent), Batemans Bay (-1.1 per cent), and Bathurst (-0.4 per cent).
Ezzy pointed out that despite being a favoured destination for city dwellers during the COVID-19 pandemic, the NSW Southern Highlands has struggled since the rate-tightening cycle began. The region’s lack of affordability has been a significant factor in its decline, as it continues to record the highest median value among the top 50 regions, at $1,159,226.
The regional property surge is further buoyed by high demand, low supply, renewed optimism, and the introduction of the First Home Guarantee scheme. Ezzy concluded, “As they have done for the past few years, Regional Western Australia and pockets of inland Queensland continue to be some of the best performing areas, but we’re also seeing renewed growth in some that had been flat since 2022.” This renewed interest in regional properties underscores the shifting dynamics in Australia’s real estate market, as investors and homebuyers alike seek value beyond the capital cities.
This article was first published on Smart Property Investment, a sister-brand of Property Buzz.