John McGrath – New value for buyers in premium regional markets
There is exciting new value available now for buyers in premium regional lifestyle areas following the market correction.
CoreLogic has just released its latest quarterly Regional Market Update canvassing capital growth rates over the past year in 25 of Australia’s largest non-capital city regions.
One of the clear trends is that the market correction has hit premium regional markets hardest.
There has been greater price falls in the most desirable regional areas simply because those areas experienced the most price gains during the pandemic.
The Richmond-Tweed regional market – which includes Byron Bay – provides a prime example.
House prices rose so significantly in this area during COVID-19 – up 51% in total – that Byron Bay’s median house price surpassed Sydney.
CoreLogic’s latest regional report shows this is the area of Australia that has experienced the biggest price falls of all 25 regions analysed during the market correction.
Richmond-Tweed house prices have dropped by 24% and apartment prices have dropped by 14%.
That means there is great new value available today for people thinking of making the move there.
Some other examples in NSW are the Southern Highlands and Shoalhaven region, where house values have fallen by 16% over the past year. Illawarra house values have dropped by 14% and apartments by 5%.
Up in Queensland, house prices on the Sunshine Coast have fallen 13% and apartments 7%. On the Gold Coast, house prices have fallen 9% and apartments have fallen 3.5%.
In Victoria, house values in Latrobe-Gippsland have fallen 7.5% and apartments have dropped 5.5%. In Tasmania, Launceston and North East region house prices are down 9%.
In every one of these examples, the price falls have been most concentrated at the upper end of the market. So, there’s extra value for buyers looking for a prestige lifestyle residence in these areas.
That massive regional relocation trend during COVID-19 did something else to regional markets beyond raising home values across the board. It has also raised the quality of housing stock.
Many city buyers had the budget to build new prestige homes or renovate local homes to create premium lifestyle residences in the regions.
At the start of the pandemic, the money that bought a modest family home in a major city bought a prestige residence in many regional areas. But the large increase in regional home values has evened that out a bit. City money does not stretch as far in the most popular regions right now.
We have been seeing a gradual shift in the type of homes being built or created through renovations in regional towns over the past decade or so, but COVID-19 really turbocharged this trend.
As home design standards have lifted in the cities, the desire for premium lifestyle homes has permeated the regions, too. This has led to the establishment of prestige property markets in regional towns that simply didn’t have them before.
We’ve also seen more developers building premium-style apartments in regional cities to accommodate older city relocators who are retiring to the coast or country, along with wealthy locals who want that ‘lock up and leave’ convenience of apartment living in the best locations.
Now that we are seeing home values rising again across the capital cities, the same trend will inevitably follow in the regions. This is just the cyclical ups and downs of property.
So, if you happen to be considering a seachange or treechange to one of Australia’s premium regional markets, I’d say your timing may be just about perfect.