Places in Australia beating impact of interest rate fears on house prices

Property prices are beginning to fall but it's a tale of two different markets across Australia. Find out the areas that are still booming.

While Sydney and Hobart have suffered a drop in house prices and Melbourne’s fell flat, there are some surprise areas in Australia beating the impact of fears of interest rate rises.

House prices in Sydney decreased for the first time since early in the pandemic by 0.1 per cent in April and in Hobart the drop was more marked at 0.44 per cent, the first time prices have fallen since early 2018.

But what is emerging is the tale of two different property markets currently in Australia, according to PropTrack Home Price Index’s latest report.

Regional areas continue to outperform capital cities across the country, with 0.44 per cent growth month-on-month compared to 0.2 per cent.

Yearly prices have also increased 23 per cent in the past year in regional areas, compared with only 14 per cent in the capitals.

Houses in regional areas are still in hot demand. Photos: realestate.com.au

PropTrack economist Paul Ryan said regional areas were outperforming capital cities for one big reason.

“Regional areas offer bigger homes and greater affordability and with more capacity to work from home, it means people aren’t considering going back to Sydney or Melbourne as their dollar stretches a lot further and they also have more of a prospect of keeping their well paying Sydney or Melbourne job with remote work,” he told news.com.au.

“People have reassessed the value of living in regional parts of the country as its much easier to work fully remotely or part remotely and you get all benefits of affordability or nice lifestyle aspects with bigger homes with home offices.”

Paul Ryan, PropTrack economist, said uncertainty around interest rates is impacting house prices. Picture: Supplied

The strongest performers in property price growth for April were regional Tasmania which saw a jump of 0.57 per cent, regional NSW which rose by 0.55 per cent as well as regional QLD at 0.51 per cent.

The closest capital city was Perth at 0.45 per cent.

But regional area’s heyday could soon come to an end. Picture: Domain

But Mr Ryan said he expects to see Sydney and Melbourne make their comeback.

“We are expecting that balance to shift back towards the major capitals as cities start opening up and all benefits of being a city liver return in terms of hospitality and live music and all those kinds of things,” he said.

“As people go back to the office more and workplace culture shifts back to being in the office and that is being seen, and immigration increases it will happen. We are being a bit more bullish on Sydney and Melbourne prices going forward.”