Regional property value growth three times higher than capital cities

Houses by the beach in an expanding regional property area.

The value of homes in regional markets has grown by almost 7% over the last 12 months – more than tripling capital city property value growth on average – according to CoreLogic.

While there was initial volatility caused by the economic impacts of COVID-19, the most recent data from the property research group saw the year finish on 3% growth across the nation, with regional housing demand outweighing supply.

“Record low interest rates played a key role in supporting housing market activity, along with a spectacular rise in consumer confidence as COVID-related restrictions were lifted and forecasts for economic conditions turned out to be overly pessimistic,” CoreLogic’s research director, Tim Lawless says. 

“Containing the spread of the virus has been critical to Australia’s economic and housing market resilience.” 

Lifestyle property surge versus CBD affordability

Chairman of Property Investment Professionals of Australia, Peter Koulizos says potential buyers should keep abreast of trends in CBD apartments and property in ‘lifestyle towns’.

He expects growth (and subsequent value increases) in areas just close enough to capital cities for occasional commuting as more workplaces adopt flexible or remote work. 

Managing director of Streamline Property Buyers, Melinda Jennison also suggests the working from home phenomenon will impact the kinds of dwellings buyers will be seeking.

“Property buyers have started to value space once again. There has been an exodus from higher density living and increased demand for single homes on their own lots, even if they are located a little further away from the CBD,” Jennison says. 

“The work from home effect may have some further relevance in the future, especially in the style of housing we choose, and if this trend is adopted as a more common way of working.”

On the flipside, Koulizos says city apartment prices may see declines in 2021, which could be advantageous for home buyers on a strict budget.

“A large proportion of CBD apartments are owned by overseas investors and lived in by international students. Due to COVID-19 restricting the numbers of overseas students, demand for CBD apartments will decrease, as will their price and rents,” Koulizos says.

2021 home loan hints 

  • Interest rates are at an all-time low. This means it’s really worth shopping around for a low-rate home loan which also has all the features you’re after. Make those lenders work for it whether you’re refinancing or just getting into the property market.
  • Having a larger deposit can make all the difference. More banks and non-bank lenders are offering even lower rates to borrowers with larger deposits. In the mortgage world, this is talked about in terms of a loan to value ratio or LVR, which is essentially the percentage of the total property value you’ll be borrowing. More low-rate loans are becoming available to borrowers with LVRs under 70%.
  • It’s first home buyer season. Between government incentives, grants, increased competition and more accessible loan terms on offer, it’s a great time for first home buyers to get a foot on the property ladder. So long as you’re in the right financial position and are ready to do your research, 2021 could be your year.

Start by heading to Mozo’s first time home buyer hub and getting your head around the basics, then check out some of the following home loan options:

Compare home loans in 2021 - last updated 28 May 2024

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  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    6.25% p.a.
    fixed 3 years
    6.20% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

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  • Discount Variable Home Loan

    Owner Occupier, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.01% p.a.

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

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  • Discounted Home Value Loan

    Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.09% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

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