Regional markets record huge year, outpacing capital cities by double

Tales of Australians making tree and sea changes or flocking from capital cities to regional areas over the past year have been plentiful, and it's a narrative that seems to be well supported by data. 

CoreLogic's latest regional market update paints a very clear picture of the past year: median home values in regional areas have grown at twice the pace of those in capital cities over a 12 months period to April. 

Even with the huge growth seen in major city markets so far in 2021, the year-on-year increase for regional areas sits at +13.0 per cent compared to +6.4 per cent gains for the capitals. 

We take a look at the biggest winners in the CoreLogic report out of the country's 25 largest regional markets. 

Best performing markets for houses

As was the case last quarter, NSW's Richmond-Tweed region has come out on top for yearly growth, with median house prices surging +21.9 per cent. 

"Playing into the lifestyle trend, it’s no surprise to see the Richmond-Tweed area topping the list for capital gains over the past 12 months," says CoreLogic's research director Tim lawless. 

The region contains coastal destinations like Byron Bay, Suffolk Park, Lennox Head and Tweed Heads which have proved especially attractive during the pandemic. 

"The median house value across the Byron council area is now $1.4 million, which is higher than Greater Sydney’s median of $1.147 million," Mr Lawless notes.

Tony Holland is the sales manager at McGrath Coolangatta/Tweed Heads and says that the boom is partly to do with prices in his area catching up after years of being undervalued, but ultimately it comes down to huge buyer appetites.

"There's high demand from every sector of the public, so you've got your first home buyers, your downsizers, upsizers, investors, interstate buyers, Brisbane buyers," he says. 

"Everyone is seeming to want to buy property at the moment—and all types of property, whether it's investment property right through to luxury lifestyle properties."

Christian Sergiacomi runs Pacifico Property in Byron Bay and says "the market just kept taking itself to another level each week."

Larger rural properties are proving to be especially sought after, with some that been unsuccessfully listed on and off for years suddenly fetching nearly double their original multi-million dollar asking prices as frenzied out-of-town buyers battled to secure their piece of paradise. 

"We sold out for a while there, anyone that was game to sell already had," he says of the supply squeeze. "All of a sudden [vendors] were like 'well why would I sell if I've got nowhere to go?'"

Mr Sergiacomi keeps expecting the pace to ease off, but he says "in the last two weeks I've never been to so many listing requests."

Heading away from the NSW coast, properties shifted at a rapid pace in Victoria's historic city of Ballarat over the past year, averaging just 24 days on market.

Nearer to Melbourne, Hume sellers rarely had to sweeten the deal for prospective buyers, with demand keeping vendor discounts right down to just -2.3 per cent. 

And key WA port town Bunbury saw a huge uptick in sales volumes, jumping up +51.4 per cent over the year, although that didn't translate to a strong boost in values—only +3.0 per cent growth was recorded. 

Best performing markets for units

In terms of the standout unit markets, Central Queensland saw a massive surge in sales volumes over the past 12 months, coming close to doubling the figures seen in the previous year. 

Vendors in Ballarat had little to do in terms of discounting to shift their properties, recording the lowest national discount rate of -1.8 per cent. 

Down in Tasmania, units shifted at a very high speed in Launceston and the North East, typically lasting just 24 days on the market, although the region also registered a substantial downturn in sales volumes—an indicator that low stock has been driving quick sales. 

Once again, the Richmond-Tweed area in NSW came out on top in terms of annual value growth, soaring +15.5 per cent. 

"I see some negative press about units in Sydney and Melbourne, they're not in demand, but that's certainly not the case here," Mr Holland explains. 

"Holiday units and apartments near the beach are a strong part of what we sell. We're seeing strong demand for those, and at the moment we can't get enough stock. There are more buyers than properties."

That's helped along by an extremely hot rental market which is luring more investors to the area too. 

Mr Holland notes that of the 1500-plus properties his office manages, less than four are currently vacant, and the number of groups coming through at rental inspections is often greater than those coming to open homes. 

Mr Sergiacomi is seeing the same level of success in Byron Bay's unit market. 

He was commissioned to sell 28 apartments off the plan in Jonson Lane, a boutique development in the heart of town. All 28 sold within two weeks. 

A typical two-bedroom unit in the complex was sold in September for $1.2 million to a vendor who reconsidered, and Mr Sergiacomi ended up relisting it months later. 

"It sold for $1.8 million with still a year to go with the build."

And why is Byron so feverishly sought after at the moment? 

"It's just that thing, no one ever really knows why. I often say it doesn't have a particular attraction apart from the geography. It's just got the lighthouse, the walks, the beaches, the surfing, and that just seems to really get to people. It always has."

In regards to the 'Hemsworth effect,' he says "celebrities have been coming for years, I don't think it's that. That just adds to extra marketing, but this place markets itself."