Nerida Conisbee,
Ray White Chief Economist
Regional Australia was the standout during the pandemic with the virus sparking the greatest movement of people to these parts of Australia ever recorded. This population growth, combined with travel restrictions leading to strong demand for holiday homes, as well as outstanding mining and agriculture conditions led to very strong house price growth. But like the rest of Australia, this price growth stalled once interest rate increases started up again. However, this growth has returned.
While many parts of regional Australia saw price declines in 2022, most didn’t. Of the 44 SA4s, just 17 saw prices falling. The ones that did decline were mainly holiday destinations. Richmond-Tweed’s median dropped by $65,600 while Sunshine Coast dropped $48,000. Meanwhile the south-east of South Australia, as well as the Wide Bay region of Queensland kept increasing, likely driven by strong agricultural performance.
The price increases that have been occurring since the start of the year are again in popular holiday destinations. These areas tend to move fairly closely with capital city price growth so this is consistent with this trend. Topping the list is the Gold Coast where prices are up $21,300 in the first four months of the year. Within two months, it is likely that the declines experienced in 2022 will be erased completely. Coming in second is the Illawarra, followed by the Sunshine Coast.
What is the outlook for regional Australia house prices? Holiday home demand is likely to remain subdued however regional locations experiencing strong population growth will continue to see prices moving upwards. Mining conditions also remain strong, supporting many more isolated parts of Australia. The big change however will be areas supported primarily by agriculture. Agricultural production hit a record high in 2022 however conditions have changed considerably in 2023. Prices for livestock have pulled back while far better farming conditions overseas have led to softer demand for Australian produce.
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