Australia’s regional housing markets have continued to demonstrate resilience, with property values rising 1.0% over the three months to January, compared to the -0.7% decline in capital city values, according to CoreLogic’s latest Regional Market Update.
While growth in regional markets has stabilised, growth patterns across individual markets are shifting, with signs of a slowdown emerging in some areas.
Over the quarter, Western Australia and Queensland recorded the strongest value gains across the country’s largest 50 regional Significant Urban areas, with Geraldton (6.3%), Albany (5.9%), Mackay (5.7%), Townsville (5.1%), and Gladstone (4.3%) leading the charge.
However, momentum in most of these markets is shifting. Gladstone’s quarterly growth rate has more than halved from the 9.9% rise recorded in July 2024.
Similarly, Geraldton’s three-month growth rate has slowed by 2.6 percentage points from its August peak. Compared to the three months to October, 28 markets have seen a slowdown in the quarterly pace of growth, with the 10/11 Queensland markets and three in four Western Australia markets recording an easing in growth.
CoreLogic Australia economist and report author Kaytlin Ezzy said its likely growth in these markets will continue to moderate as affordability concerns dampen demand.
“Queensland and Western Australia markets have driven regional growth for the more than a year, however they are now clearly losing steam,” she said.
“The historically affordable mining markets of Gladstone, Townsville, Mackay and Geraldton, and the coastal markets of Busselton and Bunbury, have all seen significant growth over the past year, adding between $100,000 and $140,000 their respective medians.”
“While these markets continue to demonstrate strength, the slowdown in quarterly growth suggests that peak growth conditions in these areas may have passed.”
She said that while some markets are cooling, others are showing renewed strength.
In NSW, Bathurst recorded the sharpest turnaround, moving from a -1.8% decline in October to a 4.2% increase in January. Taree, Warragul-Drouin, and Ballarat also showed signs of stabilisation or modest uptick in growth.
“Regional markets in Victoria and the southern parts of NSW where among the worst performers in 2024, however, they have arguable gained somewhat of an affordability advantage over that time.”
“We could be seeing the first green shoots in these markets, if growth conditions continue to improve.”
Rental market continue to slow despite seasonal uptick
Regional rental markets experienced renewed momentum in January, with rents rising 1.6% over the quarter, compared to a 0.3% increase in capital cities.
While up from a recent low in Q3 2024 (0.4%), the uptick in the quarterly rental trend is largely seasonal, with the broader annual trend in rental growth continuing to moderate.
Busselton recorded the strongest quarterly rental growth at 4.6%, while Geraldton remained the standout performer on an annual basis, with rents climbing 13.8%, adding $64 per week to median rental values.
Ms. Ezzy said that vacancy rates remain relatively tight, with regional vacancy rates coming in at 1.9%, down slightly from 2.0% a year ago.
Warrnambool had the tightest rental market, with a vacancy rate of just 0.3%, while Dubbo and Bowral-Mittagong saw the highest levels of available rental stock at 3.9% and 3.3% respectively.
Key findings – CoreLogic Quarterly Regional Market Update
- Regional dwelling values rose 1.0% over the quarter, outperforming the -0.7% decline in capital city values.
- Geraldton (6.3%), Albany (5.9%), Mackay (5.7%), Townsville (5.1%), and Gladstone (4.3%) were the top performers for quarterly value growth.
- Geraldton also recorded the strongest annual value growth, up 32.2% or around $118,000 over the year.
- At the other end of the scale, Ballina was the weakest performer over the quarter, down -2.8%, while Ballarat saw the largest annual drop with values falling -4.9% over the 12 months to January, equivalent to a -$27,500 decline.
- Regional rental markets experienced renewed momentum in January, with rents rising 1.6% over the quarter, compared to a 0.3% increase in capital city rents. However, this uptick was largely seasonal, with the annual trend continuing to moderate to 5.9%.
- Across the largest 50 regional markets, just four saw rents decline over the quarter, while all recorded an annual increase in rental values.
Download the quarterly CoreLogic Regional Market Update in full online for in-depth insights into the trends shaping regional property markets.
CoreLogic Australia