According to CoreLogic’s Housing Chart Pack for February, regional property values grew by 1 per cent over the rolling quarter, while capital cities experienced a decline of -0.7 per cent.
The data reveals that 72.6 per cent of regional suburbs recorded value increases over the three months to January, showing significant improvement from 66.2 per cent in the September quarter.
The shifting dynamics between regional and capital city markets have become more pronounced, with affordability playing a key role.
CoreLogic Economist Kaytlin Ezzy said there’s a widening price gap between regions and capitals.
“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,” Ms Ezzy said.
The trend towards regional living appears to have staying power, with remote work arrangements continuing to influence housing choices.
Migration patterns show an increased flow of city residents moving to regional areas while fewer people are leaving regional locations for capital cities.
Capital cities are facing increasing pressure, particularly in the largest markets.
Sydney has seen three in four suburbs experience value declines over the recent quarter, while Melbourne reported declines in nine out of ten suburbs.
This trend is beginning to spread to other capital cities, including Brisbane, Adelaide, and Perth.
The rental market continues to evolve, with national rents increasing by 4.4 per cent over the year to January.
However, experts predict a slowdown in rental growth during the first half of 2025.
The market has shown interesting patterns in vendor behaviour, with sellers having to be more flexible in their negotiations.
“Vendor discounting rates have expanded, with sellers needing to negotiate a little more in order to secure a sale,” Ms Ezzy said.
“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.”
