Article published 08 June 2021
Buying a home has certainly stood the test of time as one of the best decisions we can make. Figures from the Real Estate Institute1 confirm Australian housing prices have soared 500% over the past 25 years.
Values continue to climb driven by super-low interest rates and strong buyer demand. CoreLogic data2 shows that as of April 2021, the combined value of the Australian housing market climbed to $8.1 trillion, with the CoreLogic Home Value Index 7.6% above its previous high of October 2017.
However, the big news story of the past 12 months has been skyrocketing values across regional Australia.
Regional values grow at twice the pace of big cities
Country values have far outpaced capital city markets, rising 13.0% over the last 12 months, compared with a 6.4% gain across state capitals.
As a guide to the strength of country markets, at the start of 2020, the median home value across the nation’s regions was $380,657.3 By May 2021 that figure had jumped to $457,938.4
Lifestyle and affordability drive demand
CoreLogic’s research director, Tim Lawless, says the faster pace of growth of regional values reflects stronger demand for regional areas during the pandemic.5
He adds, “This can partly be explained by the new popularity of remote and flexible working arrangements, but also increased demand for lifestyle oriented properties and holiday homes. No doubt Affordability is another drawcard for regional markets. As lawless notes, “In April 2021 there was a $247,400 difference between the median value of capital city dwellings and regional dwellings.”
The top performer gains 22%6
In a country as big as Australia, it’s no surprise that market conditions vary across regional locations.
According to CoreLogic, the Richmond-Tweed area of NSW has notched up the biggest regional gains nationally. Houses in the region have risen a massive 22% over the last year. Unit prices are up 16%.7
Tim Lawless explains the gains saying, “This region includes high profile beachside destinations such as Byron Bay, Suffolk Park and Lennox Heads as well as popular hinterland villages such a Bangalow. The median house value across the Byron council area is now $1.4 million, which is higher than Greater Sydney’s median of $1.147 million.”8
The Richmond-Tweed area isn’t the only regional market experiencing rapid price growth. As Table 1 shows regional markets more broadly have notched up impressive gains.
Table 1 Regional value growth – 12 months to 1 May 2021
Source: CoreLogic Hedonic Home Value Index May 2021
While regional WA hasn’t seen values soar on the whole (yet!), some areas are over-achieving as a result of a burgeoning resource sector.
The Real Estate Institute of WA9 reports Port Hedland saw house values leap 9.4% in the March 2021 quarter, with Esperance and Kalgoorlie-Boulder also recording impressive gains.