Regional house prices slump as post COVID conditions kick in | Kanebridge News
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Regional house prices slump as post COVID conditions kick in

By Robyn Willis
Thu, Aug 18, 2022 9:41amGrey Clock < 1 min

The shine has rubbed off the regional housing market with some NSW and Queensland beach and country hot spots recording the first quarterly fall in house values.

The Regional Market Update from CoreLogic, which investigates growth across the country’s largest non capital cities showed that the greatest falls were in NSW with the Richmond-Tweed region, down -4.5 percent, followed by the Illawarra on -3.5 percent, and the Southern Highlands and Shoalhaven areas on -3.0 percent.

In Queensland, the Sunshine Coast and Gold Coast regions suffered the biggest losses in the past quarter, down -2.5 percent and -1.2 percent respectively.

In better news for regional homeowners, the NSW Riverina region recorded a 27.8 percent increase over the past year. Wide Bay in Queensland experienced a 26.8 percent jump while the New England and North West regions in NSW were up 26.4 percent.

CoreLogic economist Kaytlin Ezzy said the regions that showed strongest growth through COVID  are now demonstrating weaker selling conditions as interest rate increases, affordability constraints and non-discretionary inflation have a negative impact on demand.

“Typically, markets with a higher median value tend to lead the broader market when shifting through different cycles. After recording some of the strongest value growth throughout the COVID period, each of these areas now have a median house value in excess of $1 million,” Ms Ezzy said. “As we move further into the downward phase of the cycle we would expect to see this decline in values to spread into more regional areas.”

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RMIT expert says a conflation of factors is making the property market hard than ever to predict

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Thu, Oct 6, 2022 9:52am < 1 min

A leading property academic has described navigating the current Australian housing market ‘like steering a ship through a thick fog while trying to avoid obstacles’.

Lecturer in RMIT’s School of Property Construction and Project Management Dr Woon-Weng Wong said the combination of consecutive interest rate rises aimed at combating high inflation, higher property prices during the pandemic and cost of living pressures such as the end of the fuel excise that occurred this week made it increasingly difficult for those looking to enter or upgrade to find the right path.

“Property prices grew by approximately 25 percent over the pandemic so it’s unsurprising that much of that growth ultimately proved unsustainable and the market is now correcting itself,” Dr Wong says. “Despite the recent softening, the market is still significantly above its long-term trend and there are substantial headwinds in the coming months. Headline inflation is still red hot, and the central bank won’t back down until it reins in these spiralling prices.” 

This should be enough to give anyone considering entering the market pause, he says.

“While falling house prices may seem like an ideal situation for those looking to buy, once the high interest rates, taxes and other expenses are considered, the true costs of owning the property are much higher,” Dr Wong says. 

“People also must consider time lags in the rate hikes, which many are yet to feel to brunt of. It can take anywhere from 6 to 24 months before an initial change in interest rates eventually flows on to the rest of the economy, so current mortgage holders and prospective home buyers need to take this into account.” 

 

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