- Regional property values continue to outpace their capital city counterparts
- Three-quarters of suburbs (72.6%) across regional Australia saw an increase in dwelling values over the quarter
- In contrast, almost half (48.6%) of capital city suburbs reported quarterly falls
- Three in four suburbs across Sydney saw a decline in value over the three months to January, while nine out of ten suburbs in Melbourne recorded quarterly declines
Regional property values continue to outpace their capital city counterparts, demonstrating "remarkable resilience" in a challenging market, according to CoreLogic's Housing Chart Pack for February.
The latest data shows capital city values have dipped into negative territory, down -0.7%, compared to the 1.0% growth seen in the regions over the rolling quarter.
Drilling down further, almost three-quarters of regional suburbs analysed (72.6%) saw an increase in dwelling values over the three months to January, up from just 66.2% in the September quarter.
Over the same time, the portion of capital city suburbs recording declines has increased, from around 30% (31.3%) in September to almost half (48.6%) in January.
CoreLogic Economist Kaytlin Ezzy said these mixed results could be attributed to improved relative affordability across the regions, an increase in listing levels across the capitals, and a second wind in regional internal migration.
“After underperforming the capitals through much of 2023, the regions have regained much of the affordability advantage, with the capital city premium widening by around $50,000 over the past two years to around $240,000 in January.”
“With demand skewing towards the more affordable end of the market, it’s not surprising to see value growth shift away from the capitals, towards the regions, as cash-strapped buyers look further afield for more affordable markets.
The regions have also benefited from both an elevated flow of capital city residents moving to the regions, along with a reduction in the number of people leaving the regions for the capitals.
“We’re almost five years on from the onset of COVID and it appears that remote and hybrid working arrangements are here to stay. With more people able to prioritise lifestyle over job location, the flow of internal migrants to regional markets has settled higher than the levels seen pre-COVID, helping to support housing demand.”
Capital city declines become broad-based
While suburb-level declines have become less common across the regions, capital city declines are becoming more broad-based.
“Worsening affordability, easing new overseas migration and a steady accumulation of for sales listings has helped swing capital city selling conditions back in favour of buyers, with quarterly value decline becoming more common across the capitals, partially across Sydney and Melbourne.”
Almost three in four suburbs across Sydney saw a decline in values over the three months to January, up from just 30% in September, while nine out of 10 suburbs in Melbourne are recording quarterly declines.
“Quarterly declines are also starting to creep into Brisbane, Adelaide and Perth, as momentum leaves the stronger performing mid-sized capitals.”
These mixed results have seen the market stabilise somewhat, with regional increases cancelling out capital city declines.
“At the national level, values held steady in January, with the -0.2% decline seen in capital city values, cancelling out the 0.4% increase seen in regional values.”
This looks set to continue, with the 28-day change in the CoreLogic daily index, holding steady around the 0.0% mark.
Highlights from the February 2025 Housing Chart Pack include:
- CoreLogic estimates the combined value of residential real estate held steady in January at $11.1 trillion.
- National home values fell -0.3% over the rolling quarter, with the capitals down -0.7% and the regions up 1.0%.
- The affordable end of the market dominated growth over the past year. Nationally, lower quartile values were up 9.4% over the year, compared to a 1.5% rise seen in the more expensive upper quartile.
- CoreLogic estimates there were 27,361 sales in January, taking the annual count to 526,410 in the 12 months to January. This is down from a recent high of 534,782 sales in the 12 months to October last year.
- The rolling six-month moving average has also dipped below historic average volumes, suggesting a slowdown in sales volumes alongside weaker value growth.
- Vendor discounting rates have expanded, with sellers needing to negotiate a little more in order to secure a sale. Across the capitals, vendors offered a median discount of -3.5% over the three months to January, while the regions’ three-month median vendor discounting rate expanded from -3.6% in May to -3.8% in January.
- In the four weeks to 2nd February, CoreLogic observed 34,926 new listings nationally. While below both the five-year average (-3.6%) and the levels seen this time last year (-3.7%), new listings have more than doubled from the seasonal lows recorded over the four weeks to 5th January (15,169).
- Australian rents were up 4.4% over the year to January, which is still more than double the pre-COVID decade average of 2.0%. However, with rental growth slowing more visibly through the second half of last year, the annual change in rents is likely to fall to below average levels in the first half of 2025.
Download a complete copy of CoreLogic Australia’s February Chart Pack online.
CoreLogic Australia