Regional housing markets still outperform capitals, but gap is closing

Ezzy said the data also showed convergence in growth trends among Australia’s 50 largest regional Significant Urban Areas (SUAs), with a slowdown in high-growth markets and strengthening in less popular areas.

“We’re also seeing a convergence among the regions with momentum easing in recent high-growth markets and picking up in previously softer regions,” she said.

In April, Cotality recorded a 7.3 per cent gap between regional top and bottom performing areas, dropping by nearly half of the 14.7 percentage points recorded in July 2024.

Over the quarter, Albany in Western Australia recorded the highest growth with a 7 per cent rise in dwelling value to a median of $656,705, followed by Geraldton with a 4.5 per cent increase to $507,664.

Geraldton also recorded the highest dwelling value growth over the last 12 months at 26.9 per cent.

South Australia’s Victor Harbour-Goolwa rounded the top three, recording a 4.2 per cent dwelling price rise in the three months to April to a median value of $751,880.

On the border of Victoria and NSW, Mildura-Buronga recorded an increase of 4.1 per cent, with dwelling values now reaching $480,320, while Mackay in Queensland saw a 4 per cent rise to $480,320.

Ezzy said the recent results showed that while regional Western Australia continues to rise steadily, Queensland slowed down.

“While still taking out one spot in the top five, these results show a weakening of Qld’s grasp on the leaderboard,” she said.

“After dominating throughout 2024, the pace of quarterly growth has eased significantly in Qld’s mining markets amid worsening affordability and global economic uncertainty.”

On the weaker end of the market, Bathurst, Nelson Bay and Geelong posted slight value declines over the quarter, down -0.3, -0.2 and -0.1 per cent, respectively.

Over the last 12 months, Warrnambool led the downturn with a -4.2 per cent drop in values, while Ballarat and Geelong each recorded annual declines of -2.2 per cent.

For sellers, Cotality data showed that the condition over the last 12 months aligned with the dwelling value growth rate, with regions in Western Australia and Queensland leading the way, while NSW and Victoria trailed behind.

Regional centres such as Rockhampton, Gladstone, Mackay and Townsville saw the fastest sales, with the median time on market ranging from 11 to 13 days.

On the other hand, challenging affordability and higher stock levels dampened selling conditions in parts of NSW and Victoria, with properties in the Bowral-Mittagong region taking a median of 77 days to sell, with vendors offering considerable discounts at -5.3 per cent.

Similarly, annual rental growth in combined regional areas slowed to 5.5 per cent in the year to April, down from a 6.7 per cent peak in September.

Despite the easing, Cotality data showed that rental growth remained nearly twice as strong as the 2.9 per cent increase in capital cities.

Ezzy said affordability challenges, household consolidation, and slower overseas migration have driven the rental trend.

Albany in Western Australia led quarterly rent growth with a 5.7 per cent rise, followed by Burnie-Somerset in Tasmania at 4.4 per cent, and Taree in NSW at 3.9 per cent.

Over the last 12 months, Albany also ranked first for annual rental growth, rising 13 per cent, or $68 per week.

In contrast, Wagga Wagga was the only SUA to record a decline over the April quarter, with rents falling -0.5 per cent.

“Even as growth moderates, we continue to see reasonably strong rental increases across most regional markets, reflecting tight supply and shifting demand patterns,” Ezzy concluded.

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