Regional property markets dominate cities for capital growth potential
The property clock is ticking towards noon for many regional property markets listed as being in a capital growth phase but only one state capital was seen as being in a growth period.
Regional property markets across Australia are better placed to deliver capital growth than every capital city in Australia outside of Perth.
That’s the assessment made by independent property valuation and advisory group Herron Todd White, whose Month in Review for May designated 16 housing markets as being in a rising market – all but one of which (Perth) were regional centres.
Their analysis was just as compelling for units, with 17 of the 19 areas deemed to be in a rising market regional, with only Darwin and Perth among the capital cities expected to deliver real estate price growth.
While many prestige regional property markets that benefited most from the pandemic exodus from the cities have taken a hit, markets from Broome in Western Australia to Dubbo in New South Wales and Rockhampton in Queensland are experiencing an uplift that is expected to continue.
Migration driving regional property markets
Tony Hutchinson, Managing Director of Hutchinson Real Estate in Broome, highlighted the fact that regional markets with diverse economies not reliant on a single industry, such as mining, were among those rated as being in a rising market.
“Broome had a long downturn and Covid brought many people looking for a sea change and a tourist boom also brought good energy to the town.
“Listings are now tight, turnover high and the rental market is very tight with steeply rising rental prices.”
Mr Hutchinson said there was more upside in the local property market.
“Melbourne buyers love Broome as it’s a great winter escape and we are certainly on the radar of Sydney investors too.
“As well pearling, cattle and tourism, including cruise ships, there’s a new mine opening between Broome and Derby that will generate a few hundred jobs, with a flow-on effect for the local economy.”
“My feeling is that the market will continue to creep up as interest rates peak and rental returns froth.”
Long term property price growth
Like the rest of Australia, regional Australia is experiencing large declines in dwelling approvals and that limited generation of new housing supply is propping up prices in the face of interest rate hikes.
Regional Australia recorded 3,090 total dwelling approvals in April 2023. This represents a 23 per cent decline on the same period last year compared to combined metro, which is down 30 per cent.
The total number of dwellings approved in Australia fell 8.1 per cent in April, according to Australian Bureau of Statistics data released Tuesday (30 May).
The past five years has, however, seen some regional homeowners win the ‘property lottery’ with gains as much as $1.1 million in median home prices, according to PropTrack data released Wednesday (31 May).
The mantra that property should be seen as a long-term investment is also underscored by the growth experienced in the best performing regional property markets over the past ten years.
Lifestyle areas saw the biggest growth in house prices, as property seekers sought out coastal and parkside living.
Source
31.05.2023
API Magazine; Craig Francis
Full article can be found here
