Would you move to a new city to buy a home?

With home values on the rise, Australians priced out of the markets where they currently live may have to consider a change of scenery if they want to buy. 

Home prices are rising to record levels 

The latest CoreLogic Home Value Index (HVI) reveals that Australian dwelling values have hit a record high, just narrowly cracking April 2022’s peak by 0.03% on 22 November 2023.

It’s been described as a ‘V-shaped recovery’ by CoreLogic’s executive research director, Tim Lawless, who said it took about 9 months from April 2022 for the index to bottom out in January 2023, and a further 10 months for the new record high to come about last week. 

"The 'V' shaped recovery may seem counterintuitive, given high interest rates, deeply pessimistic levels of consumer sentiment and high cost of living pressures, however, the recovery can be explained by an imbalance between supply and demand," Lawless said.

If the shape of the line looks less like a ‘V’ and more like someone forcing themselves to smile, you might be a prospective homeowner who’s watching house prices and interest rates rise with rapidly deflating enthusiasm. 

However, this whirlwind recovery is, for the most part, isolated to only five capital cities and four of the states’ regional areas – it’s in the others where there could be an opportunity for those who wouldn’t mind a change of scenery. 

The cities and regions where prices are stable or dropping

Capital cities: 

• Hobart  (-1.5%) 
• Darwin (-0.8%)
• ACT/Canberra (+0.5%). 

According to CoreLogic, year-on-year (YOY) home values in Hobart (-1.5%) and Darwin (-0.8%) have gone down, with the ACT (Canberra) only experiencing a +0.5% increase in dwelling values, according to CoreLogic.  

These three cities are all trending down compared to their record highs, with Hobart posting a -11.8% decrease since its most recent high in March 2022. 

Darwin is also down -3.3% since its record high in September 2022 and the ACT (Canberra), despite its slight increase in YOY values, has slipped -6.4% since May 2022.

It’s a similar story in the nation’s regions, although with less pronounced YOY declines. 

Regional areas:

• Regional Victoria (-2%) 
• Regional Tasmania (-0.3%)
• Regional Northern Territory (-0.4%). 

Regional Victoria, Tasmania, and the Northern Territory all experienced small decreases in dwelling values, the largest of which was regional Victoria, with a -2% decline. 

Regional Tasmania and the Northern Territory stayed reasonably flat at -0.3% and -0.4% respectively. 

These regional areas have all experienced a significant drop in value since their record highs, with regional Victoria showing a drop of -7% since May 2022. 

Home values in regional Tasmania have dropped -5.4% since May 2022, while regional Northern Territory values decreased -3.4% since April 2023. 

Resident Mozo finance expert, Peter Marshall, recently made the decision to leave Sydney for more affordable interstate shores and shared some practical tips for those considering the move.  

As a renter in Sydney for over three decades, Marshall says that buying in Australia’s most expensive housing market was “never on the table as an option.”  

“The home price thing was an enormous part of why I left Sydney,” he said. “It’s possible I would’ve stayed, I don’t know. But given the choice between renting in Sydney and buying somewhere else, it becomes much easier.” 

Marshall did his due diligence before putting the wheels of his move into motion, helping to make sure there weren’t any surprises on the cost front. 

His biggest tip?   

“Budget more than you think you need for everything.” 

Marshall recommends budgeting for a small amount above every quote that you get, whether it’s for conveyancing fees, or building and pest inspections. 

“That means when you get around to having to pay for things, you find that some things end up costing a little bit more, you’ve got room in your budget to deal with that – and it’s not going to be the end of the world.” 

Aside from giving yourself some budgetary wriggle room, Marshall also recommends sorting out your conveyancer and inspectors before you lock into making an offer on a home, as once the ball starts rolling, things can move quite quickly. 

“You spend months and months looking for a place to buy and, all of a sudden, you need to have all these things at your fingertips. So have those things at your fingertips before you need them because when you do, you won’t be wanting to do that research,” he said.  

The same ethos applies to your home loan financing. You’ll want to have a lender on hand, ready to go well before signing the deed, so you know exactly how much money you can borrow to buy your new home. 

That also means you’ll need to compare home loan interest rates to see which lenders currently offer competitive rates and the home loan features you want. Get started with some of the featured products below.