Regional markets shine amidst urban property slumps

Regional property values have demonstrated exceptional resilience, consistently outperforming their metropolitan counterparts.

CoreLogic’s Housing Chart Pack for February revealed that regional markets not only held their value but also saw a significant appreciation, with a growth rate of 1% over the past quarter.

This performance starkly contrasts with the capital cities, where property values declined by 0.7%.

Widespread increases across the regions

In-depth analysis showed that a substantial majority of regional suburbs, approximately 72.6%, experienced an increase in property values during the last quarter.

This is an improvement from 66.2% in the previous quarter, highlighting a strong upward trend in regional property markets.

Capital city declines broaden

The landscape in capital cities has grown increasingly challenging, with nearly half (48.6%) of the suburbs experiencing declines in property values – a significant rise from 31.3% just four months earlier.

Major cities like Sydney and Melbourne have been particularly affected, with three-quarters and nine out of ten suburbs in these cities respectively witnessing declines.

Factors influencing market dynamics

Kaytlin Ezzy (pictured above), CoreLogic economist, attributed the diverging trends to several factors.

Improved affordability in regional areas, combined with increased listings in capital cities and ongoing internal migration to regional areas, have influenced these patterns. A mid-2024 AHURI study underscored this trend, showing that internal migration significantly impacts house prices across both local and distant submarkets.

“After underperforming the capitals through much of 2023, the regions have regained much of the affordability advantage, with the capital city premium widening by around $50,000 over the past two years to around $240,000 in January,” Ezzy said.

National stability amidst local fluctuations

Despite the disparities at the suburb level, the overall national property values remained stable in January, with a minor 0.2% decline in capital city values offset by a 0.4% increase in regional values.

The 28-day change in the CoreLogic daily index remained steady, suggesting a balancing act between regional growth and urban decline.

Key insights from the CoreLogic Housing Chart Pack

The February 2025 Housing Chart Pack highlighted several important trends:

• The combined value of residential real estate remained steady at $11.1 trillion.
• Nationally, lower quartile home values surged by 9.4% over the past year, outpacing the upper quartile’s growth.
• Sales volumes are showing signs of a slowdown, with a decrease in annual sales and an expanded rate of vendor discounting, indicating a more negotiable market.
• Rental growth has slowed, with a projected dip below average levels in the coming months.

With urban markets facing downward pressures, the allure of regional living continues to grow, supported by favourable conditions and lifestyle preferences solidified during the pandemic era.

Read the CoreLogic media release here. Download a complete copy of CoreLogic Australia’s February Chart Pack online. To compare the latest results with the previous month’s, click here.