We all know our beloved cities are getting more expensive by the minute but thats not all. The ripple effect is being felt in key regional markets surrounding Sydney and Melbourne following a four year boom that has sent home values skyward by 64% and 44% respectively.
After that sort of growth, it’s not surprising that some city dwellers are looking to nearby regional centres for better value. Some are buying for a lifestyle change as well as more affordable property prices, while others are using sizeable new equity in their city homes to purchase for investment or holiday purposes.
All of this is pretty predictable at the end of a boom and the latest Regional Market Update from CoreLogic RP Data shows it’s occurring now.
Image via McGrath
The research looks at a variety of key regional locations and reports a noticeable pattern of growth in centres located closest to Sydney and Melbourne.
The stand-out is the Illawarra region on the south coast of NSW, which recorded the biggest increase at 14.3% for houses and 13.9% for apartments over the 12 months ending June 2016.
Up north in Newcastle and Lake Macquarie, sales activity is down but prices have moved forward by 8.9% for houses and 5.9% for apartments. In the Richmond-Tweed, both house and apartment prices are up 8.4% and sales activity is almost 20% above its five-year average.
These aren’t boom time price rises but definitely good solid price appreciation that is likely to continue as Sydney’s growth cycle slows down.
In Victoria’s Geelong, houses prices rose 5.6% and apartments 3.4%. The Latrobe-Gippsland region also experienced a price bump of 3.9% for houses and 0.6% for apartments.
Now, a word about Queensland.
The two major regional markets close to Brisbane are the Gold Coast and Sunshine Coast and they were the strongest performing areas in the state over the year to June.
But they’re not feeding off lack of affordability in Brisbane because the city hasn’t boomed yet. It’s had steady price growth for the past few years but nothing near the scale of Sydney and Melbourne as yet.
So at the moment, price growth on the Sunshine Coast and Gold Coast is largely down to local factors.
On the Sunshine Coast, the effect of the new University Hospital on the property market cannot be overstated. That one major project has brought a lot of confidence to the area and a huge injection of professional jobs once it opens next year.
We’re also seeing local upgraders and seachangers from Sydney and Melbourne buying for a lifestyle change now or holiday homes with a view to living there in retirement. There was 4% growth in house prices and 4.5% growth in apartment prices over the year.
On the Gold Coast, there’s lots of excitement in the lead-up to the 2018 Commonwealth Games with plenty of infrastructure being built that will serve the city long after the event.
There are cranes in the sky along the waterfront as both local and Chinese developers continue to build. Price growth over the year to June was 7.4% to a median of $573,000. Apartment values rose 5% to $377,000.
By comparison, over the same timeframe Brisbane house prices rose 5.6% to a median of $505,000 and apartments rose 2.4% to $389,000.
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