Australian home values have not only surpassed where they sat pre-COVID, but reached a “fresh record high” in January 2021, with CoreLogic’s national home value index reading 0.7% higher than its previous September 2017 peak.
Notably, every capital city and rest-of-state region recorded a rise in housing values over the month, ranging from a 2.3% jump across Darwin to a more reserved 0.4% rise in Sydney and Melbourne.
Home prices rose in 85 of the 88 largest sub-state regions across Australia over the first month of the year, with 46 of those charting record highs, led by gains of 3.6% in the Queensland Outback and 3.2% in Northwest Victoria.
These figures point to a trend which has held steady throughout the pandemic: values are rising more quickly in regional housing than in capital cities. In the case of January, at more than twice the pace.
The CoreLogic Home Value Index of national home prices rose by 0.9% in January, with prices up 3.0% over the year. However, capital city home prices accounted for just 0.7% of the lift, with regional prices up 1.6% in January to sit 7.9 higher over the year – the strongest annual growth rate in 16 years.
According to CoreLogic data, some of the largest states are even seeing regional home values rise at more than three times the pace of their capital city counterparts.
CoreLogic research director, Tim Lawless, explained that the divergence between metro and regional housing demand is most substantial in New South Wales and Victoria.
“Internal migration data shows more people are leaving Sydney and Melbourne for regional areas, resulting in a transition of activity from the metro regions to the outer fringe and regional markets,” Lawless said.
“This demographic trend is further compounded by the demand shock of stalled overseas migration. As Melbourne and Sydney historically receive the vast majority of overseas migrants, these metro areas have been the hardest hit by this demand shock.”
In January, home values across Regional Victoria and Regional New South Wales rose by 1.6% and 1.5% respectively compared to the 0.4% increase in home values across Melbourne and Sydney.
“Better housing affordability, an opportunity for a lifestyle upgrade and lower density housing options are other factors that might be contributing to this trend, along with the new found popularity of remote working arrangements,” said Lawless.
