National

SEPTEMBER 07, 2021

Regional property prices still growing in August but not as fast as before

REALESTATEVIEW.COM.AU

Australia's record run of property price growth has peaked but key regional markets are still clocking large month-on-month returns according to the latest data from CoreLogic.

August figures from the data firm show that prices in combined regional markets grew by 1.6 per cent last month, pipping the 1.5 per cent growth recorded across the combined capital cities.

Dwelling prices in regional Tasmania, the country's fastest-growing market, jumped by 2.9 per cent during the month of August to sit at a current median of $431,469.

That result saw the region outperform all other regional markets and the capital cities - even Hobart and Canberra, which clocked rises of 2.3 per cent and 2.2 per cent respectively.

But the pace of growth in mainland markets is showing clear signs of slowing, according to Tim Lawless, CoreLogic research director.

"The pace of growth is slowing across both metro areas and regional areas of New South Wales and Victoria, with each of these regions moving through a peak rate of growth in March this year," Mr Lawless said.

"At that time the monthly rate of growth peaked at 3.7 per cent across Sydney and has since slowed to 1.8 per cent in August.

"Similarly, the monthly rate of growth across regional NSW moved through a recent peak in March at 2.8 per cent, slowing to 2.0 per cent by August. Regional Victoria found a peak rate of monthly growth in March at 2.6 per cent and conditions have eased back to 1.3 per cent, while in Melbourne the peak rate of growth has eased from 2.4 per cent to 1.2 per cent," he said.

One key factor contributing to the tapering of growth rates was a growing reduction in affordability.

"The factors contributing to slower growth conditions are likely to be a mixture of localised factors, but worsening housing affordability is probably a key factor. With housing prices rising so much faster than incomes, many of the regional areas are losing their affordability advantage relative to the capitals," Mr Lawless said.

Mr Lawless said that the strongest markets for growth in NSW and Victoria tended to be "areas popular with lifestyle buyers".

"Richmond Tweed values are up 29.5 per cent over the past twelve months followed by the Southern Highlands and Shoalhaven (28.3 per cent) and Coffs Harbour/Grafton (27.6 per cent). The top performing regional market over the past twelve months in Vic has been Warrnambool and South West where housing values are 22.9 per cent higher over the year," he said.

The most significant slowing in the rate of growth, in percentage point terms, has been in Warrnambool and South West Victoria, according to Mr Lawless.

The rolling quarterly increase in that region has falled by 6 per cent from a recent high of 9.7 per cent over the three months ending April to 3.7 per cent at the end of August.

Similarly, Shepparton recorded recorded 4.8 per cent reduction from 6.1 per cent in April to 1.3 per cent in August, the second largest drop of all regional markets.

Results for Perth and regional WA have been omitted from this month's index while CoreLogic investigates a "divergence" in the figures.

This may have an impact on the aggregate numbers for combined regional and capital city price growth, the company said.

By Jack Needham - This article first appeared on ACM

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