Property prices continue to rise in regional NSW as Sydney prices fall, PropTrack data reveals

Areas of NSW are recording double digit price growth while home values slide in Sydney – and the best performers aren’t the most popular tree-change destinations.

Kate McIntyreReal estate reporter

2 min read

November 15, 2022 - 5:00AM

The Far West region of NSW has recorded good growth in the year to October.

Home values are up in some of the state’s most remote regions as Sydney property prices continue to fall.

Data from PropTrack shows the most inland regions of NSW recorded double digit price growth in the year to October even as Sydney dwelling values fell close to 6 per cent.

The Orana Region recorded more than 11 per cent growth over the past year.

Regions recording the highest level of growth over the year included New England and the North West (15.69 per cent) and the Central West (12.64 per cent).

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The Far West and Orana region, home to towns such as Broken Hill and Dubbo, recorded 11.46 per cent growth over the past year.

The tree-change movement has seen prices rise across country NSW. Picture: Heidi Bell/Heidi Bell Photography.

In contrast, some of the most popular tree-change hot spots recorded modest or negative growth over the year.

Dwelling values in the Richmond-Tweed region of Northern NSW fell 0.82 per cent year on year, and 6.3 per cent from the peak.

Despite prices starting to slide, values in the Richmond-Tweed remained 51 per cent higher than pre-pandemic levels with the median value now at $830,000.

Values in Shoalhaven and the Southern Highlands grew 1.36 per cent over the year and fell 5.3 per cent from the peak to reach a new median of $854,000 – about 54 per cent higher than pre-pandemic levels.

House prices have gone up 23 per cent since October 2021 in Dubbo.

PropTrack economist Eleanor Creagh said seven months of RBA rate hikes had reduced the borrowing capacity of Aussies by about 20 per cent, leading to greater price pressure in the more expensive regions of NSW.

Regional values had risen 5.54 per cent across the board while Sydney values had dropped 5.82 per cent.

“Affordability is a driver,” Ms Creagh said.

“As interest rates have risen and borrowing capacities have fallen we have seen that, on a relative basis, demand has remained stronger for more affordable regions.”

PropTrack economist Eleanor Creagh.

While property listings in Sydney have shot above prior decade averages, representing more choice and negotiating power for buyers, listings remain below pre-pandemic levels in most regional parts of the state.

It comes as the tree-change movement shows signs of continuing.

“Although the pace at which the regional move was occurring has likely eased, we are still seeing that shift is in play,” she said.

“People are still taking advantage of remote and hybrid work opportunities.”

Of the 13 regions highlighted in the data, 11 had recorded price growth of more than 40 per cent since the start of the pandemic.

Ms Creagh said while further interest rate hikes were expected to bring prices down across regional NSW, it was extremely unlikely values would return to pre-pandemic levels.

“To see price falls of the magnitude that would take them back to pre-pandemic levels would be like a one in one thousand year event,” she said.

“If we look at previous home price downturns on a national basis, there has only been five periods since 1990 where home prices have ended the year negative in Australia, and never have those price falls been more than 10 per cent.”

“To see price falls of more than 50 per cent you would have to see a significant event on the horizon.”