Regional centres’ change of pace opens doors to buyers – John McGrath

It’s not just Australia’s capital cities that are undergoing a property market rebalance. In a convergence of suburban areas and regional towns, we’re seeing the latter experiencing performance moderations very similar to capital cities.

The value gap between the regions and the capital cities is continuing to narrow and, just like our nation’s cities, the value momentum in our regions’ hottest towns is slowing down as weaker ones increase in popularity.

The narrowing value gap has been pretty noticeable since at least September last year and has picked up since January. According to Cotality, July was the first time in nine months that our regional markets’ quarterly growth rate (1.7%) didn’t outperform the capital cities (1.7%).

But at the same time, regional centres still have plenty to offer buyers in performance growth, like rental increases, especially when it comes to annual uplifts. For a start, Cotality’s latest Regional Market Update shows a 5.9% value uplift in our combined regions over 12 months, compared to a 3% increase in our capital cities.

It also shows that our 50 largest regional significant urban areas (SUAs) still outshine capital cities when it comes to performance growth. The value of the SUAs was 1.5% in the April quarter and 1% for the combined capital cities.