Regional Australia’s housing market has taken another hit with prestige areas such as Byron Bay continuing to reverse pandemic gains.
Richmond-Tweed (-24.2%), the southern highlands and Shoalhaven (-16.0%) and Illawarra (-13.7%) in New South Wales recorded the largest annual declines in house values.
According to CoreLogic’s Regional Market Update, all 25 regional areas monitored recorded an annual decrease in the number of house sales in the past year.
Just over a quarter of Australia’s largest 25 non-capital city regions recorded an increase in house values over the year to April, down from just over 50% last year.
Some regions still posted upturns, with South Australia’s south-east region performing the best, with values rising 10.8%, followed by the New England and north-west (NSW) and Bunbury (Western Australia) regions, up 4.9% and 4.8% respectively.
The three largest decreases in house sales all came from NSW, including Richmond-Tweed (-39.9%), followed closely by southern highlands and Shoalhaven (-39.1%), and mid north coast (-33.3%).
The Richmond-Tweed region, which includes areas such as Lismore, Ballina, Byron Bay and Tweed Heads, was the weakest-performing regional market across the country, which comes after a dramatic spike in house values during the pandemic.
The CoreLogic Australia economist Kaytlin Ezzy said the declines recorded in some of these markets were not surprising.
“Over the past year, premium lifestyle markets have been hardest hit by softer market conditions and rate increases,” she said.
“These markets were among the largest beneficiaries of regional migration through the Covid-induced upswing and, as a result, became significantly more sensitive to the rising cost of debt and the normalisation in regional migration trends.”
House values in the Richmond-Tweed region surged by 51% during the pandemic, before rising interest rates, booking property prices and the lingering impacts of the 2022 floods saw values fall -24.2% over the year to April.
According to the report, houses sold fastest in Toowoomba, Queensland over the three months to April, with an average time on market of 21 days, followed by Western Australia’s Bunbury region (27 days).
The regions with the longest-selling time were the southern highlands and Shoalhaven, with an average of 79 days on the market.
The new data comes as Sydney recorded a new low in rental listings, with the number of new listings falling 17% month-on-month in April on realestate.com.au, the lowest it had been in a decade.
According to the new PropTrack Market Insight, this was the fewest new listings since April 2012.
New rental listings across the country fell by 18.9% month-on-month, the largest fall since 2017. Total listings fell -16.5% in the past year in capital cities, led by Melbourne (-31.3%), Sydney (-15.7%) and Perth (-19.2%).
PropTrack’s director of economic research and report author Cameron Kusher said the results reflected a deepening of the rental crisis across the country.
“I think in Sydney and Melbourne, there’s potentially more that it could drop. Just because we know that migration to Australia is really strong and we know that most migrants tend to settle in Sydney and Melbourne,” he said.
Kusher added that supply would continue to be a problem, leaving a “very tough market” for renters.
“I think it’s going to continue to be a problem and the main reason for that is supply takes time. There’s a lot of stock under construction, but most of it has been sold to owner-occupiers rather than investors. So that doesn’t really help the rental market.”