Looking for a tree change? So are many homebuyers as regional prices climb

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The pattern of property price growth in more populated areas and regional areas saw a change towards the end of 2021 after lockdown restrictions eased across Sydney, Melbourne and the ACT.

CoreLogic’s quarterly Regional Market Update finds that regional price growth accelerated to 6.3% over the three months to January 2022 while capital city dwelling prices continued to slow.

Homes in North East Tasmania lead all regions  with an increase of  33.9%.

Launceston, Sunshine Coast and Kiama are areas that have seen the most significant increased property prices

Sharp increases to home prices were seen in a few regions - let’s take a closer look.

  • Launceston and the North East region in Tasmania saw a 33.9% increase in values over the period, making it the best performing unit market of the regions analysed.
  • Queensland’s Sunshine Coast region was second highest with a 31.1% increase.
  • Bunbury (WA) was the only market to see a decline in values over the 12 months to January 2022 (-8.3%).
  • Queensland’s Mackay –Isaac –Whitsunday region saw minimal growth (0.9%).
  • Byron Shire (NSW North Coast) had the highest median house value of any regional LGA at $1,838,286 (+30.2%).
  • Houses in the Kiama LGA (90km south of Sydney) recorded the largest increase at 43.9% taking its median value to $1,633,086.

What has caused these home buying trends?

According to CoreLogic’s Head of Research Eliza Owen, these trends may reflect post-lockdown market conditions, following suppressed migration and housing transaction activity across Sydney, Melbourne and the ACT in the three months to September.

Owen adds it might be due to the easing of social distancing restrictions in regional areas which in turn, “boosted buyer interest and a surge in interstate migration.”

What does this mean for the home loan market?

The increase in regional property costs means that regional areas are now less affordable for those who wish to move away from the city to take advantage of cheaper housing options. 

The surge of people moving to such areas may also have an impact on the culture and infrastructure of these regions that are not used to housing so many people. 

These trends will also most likely influence home loan rates in both regional and city areas. Right now, fixed rates are continuing their upward climb, while some lenders are offering good deals on variable rates. Currently, the average variable home loan rate is 3.09% p.a. (owner-occupier, principal and interest)

For more on the support available to first home buyers, browse our guide to ​​first home owner grant and deposit schemes. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.

Home loan comparisons on Mozo - last updated 13 August 2022

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