Regional Market Update: country homes continue to attract city buyers – John McGrath

As I’ve noted several times recently, Australia’s regional and rural areas are enjoying an extended moment in the sun. By extended, I mean six years of continued popularity, after the appeal of such locations first began to thrive in the COVID years.

The latest Regional Movers Index found the number of capital city-to-regional movers in the December 2025 quarter was the second highest since the end of the pandemic in 2022.

These moves accounted for 11.6% cent of all internal migration, and outnumbered regional-to-capital city moves by 31%.

And, let’s not forget that the growth of regional Australia’s dwelling values has continually outpaced our capital cities since November 2025, according to Cotality’s recent quarterly Regional Market Update.

They continued to do so in the three months to April, with the report showing regional areas experienced a 3.3% value increase, compared to 1.1% in our combined capital cities. And, once again, this growth is mostly due to regions’ affordability and continued internal migration.

These figures are occurring despite the fact that rural hubs are now following our suburban spaces’ slower pace of growth, says Cotality.  

In further good news for our smaller towns and rural hubs, the Regional Market Update found that these areas’ easing growth was less severe than that of our capital cities.

I agree with Gerard Burg, Cotality’s Head of Research, who said these results underscored the resilience of regional markets in the face of broader economic headwinds, as well as a clear loss of momentum at a national level.

“Affordability remains a central driver, with internal migration patterns continuing to favour regional areas where buyers can find greater value and a different pace of life,” he said.

Admittedly, capital cities’ rental markets performed better than those of regional hubs.

Cotality figures show the latter locations recorded an increase of 1.8%, up from 1.6% previously, while the combined capitals rose by 2.1%.

At the same time, regional vacancy rates are still very tight at just 1.9%, while gross rental yields remained stable at 4.2% in April, higher than the 3.6% recorded across the combined capital cities.

The report also showed that unsurprisingly, Western Australia continues to dominate regional growth, with the state’s coastal south-western area comprising the most popular towns, or Significant Urban Areas (SUA), in the country.

However, while affordability is one of the key reasons for SUAs’ popularity, there could be more to this situation than meets the eye. Some of these areas actually have higher median values than their closest capital city. Low stock could be another reason for regional centres’ strong sales.

Meanwhile, as I mentioned earlier, the figures in and around our city-to-country movers, and vice versa, are worth noting.

As the Regional Movers Index highlighted, these figures are particularly significant given that December is traditionally a softer relocation period. Yet the report noted that the seasonal drop in capital-to-region migration this year was smaller than the previous two December quarters.

Regional movers are continuing to look to newer, smaller towns for their next home rather than the still highly popular locations of the Sunshine and Fraser coasts in Queensland, and Geelong, in Victoria.

The Waratah-Wynyard region, 245km west of Launceston, attracted the greatest growth in net internal migration inflows in the year to the December 2025 quarter (315%). The Meander Valley, also west of Launceston, was highly popular with city-to-regional movers as well.

The Shire of Bridgetown-Greenbushes, south of Perth, recorded a 150% increase in such moves, with Loddon, in rural Victoria, experiencing a 25% lift.

While fairly unsurprising, these figures should nevertheless give our regions and their home owners, some much-needed encouragement and reassurance. Six years of strong growth is impressive, especially for places like Tasmania, which has generally faltered in recent years.

Along with the extraordinary growth we’re seeing in Western Australia’s and Queensland’s smaller townships, the growing popularity of regional Tasmania makes it one to watch in the future.