The CoreLogic Regional Market Update, which looks at capital growth over the 12 months to October in Australia’s 25 largest non-capital city markets, saw the two Tassie locations record growth of 10.5%.
However, Tasmania lost its hold on highest yearly growth for units, replaced by New South Wales’ Southern Highlands & Shoalhaven unit market, which recorded an annual growth of 8.6% in the year to October.
Western Australia’s Bunbury region recorded the lowest yearly house value growth for the second consecutive quarter, down 4.5%, while yearly growth for units in Victoria’s Hume region fell 7.8% over the same period.
Houses continued to outperform units, with 23 of the 25 largest regional house markets recording value rises, versus 18 regions with positive growth for units.
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CoreLogic’s Head of Australian Research Eliza Owen said regional markets were becoming more attractive, with their usual drawcards of lower purchase prices and lower density levels now coupled with the work from home (WFH) phenomenon.
“The results of this report support increasing levels of demand outside of cities," Ms Owen said.
"Regional Australia’s dwelling markets had higher rates of growth relative to capital cities through the pandemic.
"In the year to October, combined regional Australian dwelling markets rose 4.8%, compared with a 3.9% lift in the capital cities."
CoreLogic found in terms of sales volumes, the Bunbury region saw the highest change in sales volumes for houses across the region, up 24.6% over the year to August 2020, followed closely by Central Queensland, where house sales increased by 24.3%.
Meanwhile, the Launceston and North East region in Tasmania saw a 9.3% decline in house sales over the year.
Looking at days on market, the quickest selling region for houses over the year to October 2020 was Ballarat (VIC), where it is currently taking around 29 days to secure a sale.
The region with the longest days on market over the year was the New England and North West region (NSW) where houses are taking just under 106 days to sell.
Source: CoreLogic
Nationwide house price increases next year
With the shift to WFH, Ms Owen said regional markets close to capitals have seen a massive increase in popularity, and forecast a nationwide spike in house prices.
“‘Commutable’ regional areas within a reasonable travel distance to the major metropolitan centres have seen particularly extraordinary increases in demand," she said.
"House sales volumes increased by double digits across the mid north coast, Illawarra and the Hunter Valley.
“With record-low mortgage rates and confidence returning to the Australian economy, there is likely to be a broader-based upswing across both regional and capital city markets into the first quarter of 2021.”
Ms Owen said these price increases were likely to make life more difficult for first home buyers.
“For local first home buyers, declining affordability may become a problem," she said.
"Growth may start to slow in regions that have already seen a sustained upswing, due to such affordability constraints.
"These include areas such as Illawarra, Newcastle and Lake Macquarie, the Gold Coast and the Sunshine Coast, where annual growth rates in houses have already exceeded 7% in the year to October."
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