THE AFFORDABLE AUSTRALIAN REGIONS BUCKING THE PRICE FALL TREND
More than ever, it pays to tread carefully when choosing an investment property in an uneven market
More than ever, it pays to tread carefully when choosing an investment property in an uneven market
It’s easy to think that Australian house prices are on a downward spiral, as interest rates edge closer to the 4 percent mark.
And while the nation’s most expensive cities of Sydney, Melbourne and Canberra have experienced drops in values – Sydney is down 10.8 percent since February 2022 – it’s not the same story across the country, said Ray White chief economist Nerida Conisbee.
“Some markets are less sensitive to interest rates. Sydney, Melbourne and Canberra are our most expensive cities and as a result are far more sensitive to the cost of debt,” she said. “Sydney house prices have now fallen by 10.8 per cent from their peak in February 2022. Compare that with Adelaide where the median is half that of Sydney – prices are down only 1.8 percent from the peak.”
It’s a similar result in the resource capitals of Perth and Darwin.
Research by Ray White reveals that some city and regional areas are continuing to increase in value, although it’s very much on a case-by-case basis. Potential regional property investors would do well to tread carefully before purchase.
Parts of Adelaide such as Playford, the Adelaide Hills and Salisbury have seen steady increases in house values over the past year, while in Brisbane, more affordable suburbs such as the Ipswich Hinterland, Beaudesert, Beenleigh and the Caboolture Hinterland have performed well.
The Queensland regional centre of Bundaberg experienced the highest regional growth in house values during the 12 months to January 2023, with median values up from $394,436 to $422,559, or $28,123. Other parts of Queensland, including Cairns north, the Whitsundays and Maryborough also saw values go up.
Some regions of South Australia proved more resilient as well, with house values increasing on the Limestone Coast, in the Murray and Mallee and Kangaroo Island. The Upper Hunter saw the strongest growth in NSW regional house prices, up from $414,034 to $437,108.
“At a small area level, the difference between what’s happening is even more stark,” Ms Conisbee said. “The capital city areas still recording year-on-year increases are all relatively affordable suburbs in Brisbane and Adelaide. Both of these cities recorded net interstate migration during the pandemic. Most people that moved during this time initially rented and a shift from renter to buyer is likely to be in part driving price growth.
“At a regional level, the areas seeing growth tend to be more affordable holiday destinations, as well as towns that are benefiting from strong agricultural and mining conditions.”
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