Figures from CoreLogic’s Hedonic Home Value Index for March have revealed a 0.4 per cent rise in regional dwelling values, which is in contrast to a 0.2 per cent decline in capital city home values.
The report also found that regional home values performed better over the entire quarter with a rise of 1.1 per cent, compared to a 0.9 per cent fall in the capitals.
According to CoreLogic head of research Tim Lawless, regional markets are now consistently outperforming the combined capitals.
“The stronger combined regional markets performance continues a trend that began to emerge in October last year where regional housing markets showed an overall improvement in the pace of capital gains while the combined capitals trend softened,” Lawless said.
It was found that Tasmania was the strongest performing regional market, with dwelling values outside of Hobart 5.4 per cent higher over the past twelve months. However on a more geographically granular basis, the best performing regional areas tend to be located on the periphery of major cities.
High property prices and strong demand in Sydney, Melbourne and Canberra metropolitan regions appears to be having a flow-on effect for satellite cities. People are moving to places they can find affordable housing options.
CoreLogic’s figures show that outside of the capital cities, Victoria’s Geelong has shown the strongest value growth over the past year, where dwelling values are up 10 per cent over the past twelve months. This was followed by the Southern Highlands and Shoalhaven region in NSW (up 9.5 per cent) and the Capital Region and Newcastle/Lake Macquarie regions, both recording value increases of 8.3 per cent over the past twelve months.
The Central West region also saw significant home value increases over the past 12 months, up 7.1 per cent.
It is uncertain whether this trend will continue, however as the major cities continue to grow, and with no apparent end in sight to the housing affordability crisis, there may not be many options left for buyers except to move away from the major capitals and into regional areas.
Even with capital city values trending lower, the rate of decline is now easing. This can be seen in in Sydney where month-to-month falls have generally been more substantial than other capital cities.
In December 2017 and January 2018, Sydney dwelling values were falling at a monthly rate of 0.9 per cent, reducing to 0.6 per cent in February and now just 0.3 per cent in March.
According to Mr Lawless, “If the trend towards an improving rate of decline persists, the Sydney housing market may have already moved through its peak rate of decline, after dwelling values have fallen by 3.9 per cent since their end of month peak in July last year.”