Real Estate

How Are Regional Towns Performing?

How Are Regional Towns Performing?

Regional housing markets have been at the centre of attention through 2020, due to housing values outpacing their capital city counterparts.

Broadly, housing values across regional Australia (+7.9 per cent) increased by more than four times the growth rate recorded across the combined capital city regions (+1.7 per cent) over the twelve months to January 2021.

Most of the reporting on regional areas around the country has focussed on the main population centres outside of the capital cities.

These include high profile coastal regions such as Byron and Noosa, or semi-rural markets like the wine regions and hinterland locations close to the major metro regions. This is understandable, given their large populations and popularity. Most of these regions have shown substantial rises in house values over the past year.

However, many of Australia’s in-land rural markets are also showing strong housing market conditions. These areas generally do not provide commuting options back to major working nodes, nor the broad-based lifestyle appeal of coastal markets or hinterland locations. But they do provide a variety of other benefits such as low housing prices, low population densities and a rural lifestyle that may appeal to many.

These regions tend to exist within their own economic ecosystem, driven by localised factors including climatic conditions such as drought, as well as local economic drivers like agriculture, mining operations and tourism, infrastructure investment or government services.

Council regions where housing values were at record highs were generally skewed towards the largest rural population centres, where economic conditions generally show greater diversity. Seven of the ten largest population centres recorded house values at historical highs.

Council regions recording the strongest growth conditions were mixed across Australia’s in-land rural markets, however areas of Central West and North Western Queensland comprised four of the top five regions for the largest rise in house values over the past year.

Winton topped the list where Corelogic estimates house values surged 40.5 per cent over the twelve months ending January. Only 21 house sales were recorded within the Winton council area over the past year, however that was a 62 per cent lift on sales activity over the prior year, demonstrating a substantial lift in demand, albeit from a small base.

Nearby Cloncurry showed a similar result, with values rising 37.1 per cent over the year. This was on the back of sales activity lifting 38.7 per cent to reach 43 house sales last year.

Where have housing values risen the most over the past twelve months?

Focusing on the largest in-land rural population centres, the strongest performing market over the past year has been Mount Isa, where house values are up 23.1 per cent.

Despite the strong gains, house values remain 39.3 per cent below their 2013 peak at Mount Isa, highlighting the previous weak conditions that have were evident between mid-2013 through to the market finding a floor in August 2019.

Thirteen of the twenty largest rural in-land population centres have values tracking at record highs in January 2021, with most of these areas located in New South Wales or Victoria.

Overall, Australia’s in-land rural markets offer up a diverse array of living options, generally with low price tags. The highest median house value was recorded for houses within the Alpine council area at $520,588 which is about $280,000 less than Greater Melbourne’s median house value and almost $500,000 less than Sydney’s.

(Edited by This Regional Life. This article by TIM LAWLESS first appeared in The Urban Developer 26 Feb 2021. To read ORIGINAL ARTICLE.)