Demand for regional residential properties appears to be easing, with house prices in the regions growing at a slower pace since the start of the year compared to the capital cities, although the recent lockdowns could unleash a fresh wave of buying.
Experts say the lifestyle shift into the regions has moderated and affordability has deteriorated significantly for local buyers.
Between January and August, house prices in regional NSW grew by a 15.5 per cent, compared to Sydney’s 22.5 per cent rise, CoreLogic data shows.
Similarly, regional Queensland house prices rose by 15.6 per cent, while in Brisbane prices jumped by 16.8 per cent.
House prices in regional South Australia also recorded a slower 9.8 per cent growth over the same period, compared to Adelaide’s 14.4 per cent gain.
Melbourne recorded a slightly lower growth rate of 14.9 per cent compared to the 15.9 per cent growth in regional Victoria. However, the trend had reversed in August when Melbourne house prices rose by 1.4 per cent, while regional Victoria gained 1.3 per cent.
Since the end of January, house values across the combined capitals have risen by 16.8 per cent higher while regional house values were up by 14.7 per cent.
Before the easing took hold, regional house values had recorded consistently higher rates of capital gain than the capitals since April 2020.
CoreLogic research director Tim Lawless said with regional housing values rising faster than capital city markets through the housing cycle to date, many regional areas have seen an erosion of their affordability advantage relative to their capital city counterparts.