Regional Strength - How Property Markets Are Shifting

Recent data from CoreLogic’s February Housing Chart Pack reveals a notable shift in Australia's property market trends, with regional property values outperforming capital cities for the second consecutive quarter.

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Key Highlights:

Regional Property Resilience:72.6% of regional suburbs saw property value increases, compared to only 51.4% in capital cities, where nearly half (48.6%) of suburbs recorded declines. Regional values grew 1.0% over the quarter, while capital city values fell by -0.7%.

Sydney and Melbourne Struggling: Three in four suburbs in Sydney experienced value declines, while Melbourne saw nine out of ten suburbs drop in value. This marks a broader trend in capital cities, with declines also emerging in Brisbane, Adelaide, and Perth.

Why the Shift? A growing affordability gap between regional areas and capital cities has driven demand away from the capitals, with regional areas benefiting from increased internal migration and hybrid work flexibility. Over the past two years, the capital city premium has widened by around $50,000, pushing buyers to seek better value in regional markets.

Market Stabilization: While capital cities are seeing value declines, regional markets are experiencing continued growth. This mix has led to a stable national housing market, with overall values holding steady in January.

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Additional Insights:

Sales Activity: National home sales saw a slight dip in January, totalling 27,361 transactions, contributing to 526,410 annual sales, a decrease from the previous peak in October.

Rents on the Rise: Australian rents increased 4.4% over the year, more than double the pre-COVID decade average of 2%. However, growth has started to slow, and it is expected to moderate further in 2025.

New Listings: There were 34,926 new listings in early February, marking a 3.6% decrease compared to the five-year average but still a significant recovery from January lows.

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Conclusion:

The trend of regional property growth reflects a broader shift towards affordability and lifestyle flexibility. With capital cities under pressure, regional markets offer appealing opportunities for buyers and investors looking for value.

Stay tuned for further updates on the Australian property market as we continue to monitor these trends.

References:

https://www.corelogic.com.au/news-research/news/2025/regional-property-values-demonstrate-remarkable-resilience?cid=701Oa00000WT5lDIAT&utm_campaign=au-res-property-pulse-2025-feb&utm_medium=email&_hsenc=p2ANqtz--RofW2CgjbSMjyDQbdS-bG77RjRjy34q5VZpb3RQ-WE7S8F-WlE-A3_u7givMaR6VZA3iuLsJmpRvlzwFmy1Nl38FkvFQPHxtPgoBlMYSjtcbumps&_hsmi=347604566&utm_content=347604566&utm_source=hs_email

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