Rental woes in regional Australia seem far from over, as a new report has found not every place is faring the same. Photo: Michelle Kroll.
Batemans Bay has topped the list of regional areas seeing a drop in house prices, a nationwide report has found.
CoreLogic’s quarterly Regional Market Update tracks the housing market in Australia’s largest 50 non-capital city significant urban areas (SUAs).
In its latest report, overall dwelling values in regional areas rose 1.1 per cent over the three months to October, surpassing the 0.8 per cent growth recorded in capital cities.
However, Batemans Bay recorded the largest decline in the areas surveyed, with a -2.7 per cent drop – just ahead of Victoria’s Warrnambool with its drop of -2.6 per cent.
CoreLogic economist Kaytlin Ezzy said the finding was likely down to changes in supply and demand.
“That means that there’s more people trying to sell a property than usual, and fewer people trying to buy than usual,” she said.
“Those two things together put downwards pressure on values and have resulted in those weaker growth conditions across the region that we’re currently seeing.”
The town also claimed the longest selling times and largest median vendor discounts (the difference from the original asking price and the final sale price of a property) of the areas surveyed by CoreLogic.
These came in at 72 days and -5.5 per cent, respectively.
Ms Ezzy said that while lots of people made the move to regional areas in recent years, it appeared that the trend was starting to slow.
“[We have to] keep in mind these markets did see some exceptional growth over that COVID period, as everybody was leaving their capitals,” she said.
“This is likely about a bit of a correction from that, as those work-from-home policies are being wound back, and people are shifting back into the office.”
Across the country, CoreLogic found 10 markets recorded an annual decline in values – five in NSW and five in Victoria.
The report found some regional markets – such as Mackay, Gladstone and Townsville – were seeing more demand.
“They have a median [price] under $600,000, so they offer great value while also giving some of that lifestyle factors that markets like Bowral and the South Coast offer, but without the same million-dollar price tag,” she said.
Ms Ezzy said this was due to higher prices in some regional markets that had left some people “priced out of those regions”.
“Some of the locals may be looking further afield – looking at other markets outside of those [coastal] areas as a way to get into the market,” she said.
“Given the high interest rate environment, there are potentially people that aren’t able to get into the market at that higher price point, which is why we might be seeing that reduced demand.
“As prices continue to fall, it might fall back within the affordability range.”
For the rental market, Ms Ezzy said slowed migration and increased investor activity in the overall rental market were starting to dampen rental growth across the state.
“Batemans Bay – and then the South Coast [of NSW] was a kind of outlier, in terms of seeing it tip into the negative,” she said.
According to the report, Batemans Bay median rent was $548 per week, with the town also recording the weakest rental growth (at -2.4 per cent).
The next weakest was the Burnie-Somerset region (at -2.3 per cent), located in Tasmania.
Ms Ezzy said similar pressures affecting house prices were likely behind this change in rental prices.
“We could be seeing people who were looking to sell their properties, but they languished on the market instead of adding to that rental supply,” she said.
The Regional Market Update can be downloaded from CoreLogic’s website.
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