• Staff Writers

Regional house price growth outpaces capital cities

Regional Australian property prices have increased by 2 per cent per month, and 17.7 per cent this annum, faster than metropolitan prices for the same year-on-year period, the latest data indicates.

As Australians opt out of metropolitan living for the country lifestyle, CoreLogic data out on Thursday shows greater price growth in price for regional Victoria and NSW, compared to their metropolitan counterparts in Melbourne and Sydney respectively.

The data shows changes in dwelling values in the past year, with regional Victoria enjoying a 15.9 per cent annual change, compared to Melbourne's 7.7 per cent.

Similarly, regional NSW has seen a 21.1 per cent change, compared to 15 per cent in Sydney.

Whilst regional South Australia's 13.6 change is just behind Adelaide's 13.9 per cent change over the same period, it is uncommon for regional SA price growth to track so closely to metropolitan rises.

CoreLogic data from 2019 demonstrated that it is rare for regional prices to exceed, let alone keep pace with, metropolitan increases over the past decade:

Australian residential property prices rose 13.5 per cent over the 2020/21 financial year, the highest annual growth rate since 2004 and when the market was unwinding from the housing boom of the early 2000s.

The CoreLogic home value index rose 1.9 per cent in June, with prices rising in all capital cities, led by a three per cent gain in Hobart.

Over the year, house prices rose 15.6 per cent, compared to units that increased by 6.8 per cent.

Darwin posted the highest annual rate in dwelling values, increasing by 21 per cent, followed by a 19.6 per cent rise in Hobart.

CoreLogic head of research Eliza Owen said there were plenty of factors driving the housing market through the first six months of 2021 and before the recent uncertainty of growing COVID-19 cases emerged across the country.

Continued low mortgage rates, falling unemployment, elevated consumer confidence, the accumulation of savings through the COVID restrictions last year and relatively low advertised housing stock all fuelled strong demand conditions.

Ms Owen said:

"However, there are some markets where performance is starting to ease more notably.
"This easing in the pace of growth at the top end of the market is another clear signs of a shift in momentum.
"The rest of the market tends to follow movements at the high end, and this is the first time in nine months that the high-tier growth rate has not accelerated."