Regional housing markets near peak but still growing faster than capital cities

There are signs that growth in home prices in regional areas may be slowing, but there are concerns that it will do nothing to help people in rental crisis.

Domain’s latest quarterly price report revealed that the median home price in the Australian regional area increased by 3.1% in the first quarter of 2022.

It is a growth rate that exceeds several capitals; In the same period, house prices in Sydney barely moved and fell slightly in Melbourne and Canberra.

But Domain’s head of research and economics, Nicola Powell, said the growth rate in the New South Wales region was three times slower than in the last three months of 2021.

“I think affordability is becoming a barrier,” Dr. Powell said.

Coastal NSW towns such as Byron Bay and Kiama have seen a more than 40 per cent increase in property prices over the past year.

Dr Powell said the recent softening could be because buyers were hesitant to take out a large mortgage, with the median home price in the NSW region hitting a record $730,000.

“With the prospect of interest rates going up, that will affect borrowing capacity,” he said.

‘Lock, stock and barrel’

While prices in some capital cities are stagnating, Dr. Powell believed that people who recently shopped in the regions were unlikely to return.

“Those people who have bought into the regional markets really show that it’s kind of a blockade, stock and barrel movement,” he said.

Dr. Powell said COVID “runaways” who might return to the city were more likely to rent.

Domain’s Nicola Powell says there is evidence capital city housing markets are weakening.(Supplied: LinkedIn)

This week’s rental affordability snapshot by Anglicare shows that the number of available rental properties has plummeted.

Add Comment