Where home prices are growing 17pc faster than Sydney

These underrated areas with great lifestyle options are outpacing Sydney’s home price growth and they are still affordable, for now.

Home prices in regional NSW have outperformed Sydney’s property prices since March 2020, with the pandemic being the biggest driver in regional house prices on record.

A new PropTrack market insight report released Wednesday revealed the huge home price growth experienced across the country since the beginning of the pandemic in March 2020.

Four years on, Sydney’s property prices have grown by just over a third, increasing by 34.7 per cent.

But home values in regional NSW outperformed Sydney prices, with an increase of 51.6 per cent over the period.

Albury is one of the regional areas that have seen significant price growth since the beginning of the pandemic.

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Growth was particularly impressive in the southern part of the state, including in centres such as Wagga Wagga and Albury.

PropTrack senior economist and report author Eleanor Creagh said multiple forces fuelled the huge growth in regional areas.

“Strong demand, low supply of properties and record low interest rates during the pandemic contributed to the boom,” she said.

The Murray and Riverina areas home to Albury and Wagga Wagga were the highest performing regions over the past four years. Picture: Simon Dallinger.

“There were also other pandemic induced preference shifts, many reassessed their lifestyle and housing needs during this period which meant regional home prices surged during the pandemic.”

There was strong performance throughout regional NSW over the four-year period, with The Murray and Riverina regions, the latter of which includes Albury, Wagga Wagga, Gundagai and Griffith, seeing the largest growth.

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Home values in the Murray region jumped 64.5 per cent, while in the Riverina area the increase was 62.5 per cent.

Eleanor Creagh, senior economist at PropTrack.

Ms Creagh said affordability played a role in drawing new buyers to these areas.

“The median (property) value is below half a million dollars in some of these regions, that’s even after strong growth and limited stock for sale,” she said.

Ray White chief economist Nerida Conisbee said the pandemic was the biggest price driver in the history of regional NSW.

Regional NSW grew 51.7 per cent since the beginning of the pandemic.

“The time frame is significant because it includes the pandemic and the pandemic did result in extremely strong regional price growth,” she said. “We have never seen that happen to the same extent and that put a lot of pressure on housing demand.”

Due to restricted overseas travel during the pandemic, demand for holiday homes outside of the city also grew, according to Ms Consibee.

“A lot of holiday homes were purchased and there was a change in the way people were working. They didn’t need to live in the city anymore,” she said.

Nerida Conisbee chief economist at Ray White.

Ms Conisbee noted that the four-year growth recorded in some market was actually lower than the growth over 2020 and 2021, largely because of price adjustments following the interest rate hikes of 2022 and 2023.

There was another shift in lifestyle preferences. “When the pandemic ended we started to see life return to how it was pre-pandemic and the start of interest rate rises, people were increasingly called back into the office and we saw lots of people selling their holiday homes with the backlash against airbnb,” Ms Conisbee said.

It was a different story in regions such as Richmond and Tweed, which continued to show strong house price growth post-pandemic.

Regional NSW has outperformed Sydney prices in the four years since the pandemic, despite Sydney’s strong price growth in the last year. Picture: Julian Andrews

“Other smaller towns that aren’t within commuting range (of a major centre), they’re not seeing the runaway growth that they did during Covid,” Mr Consibee said.

Despite regional NSW outperforming Sydney, Ms Creagh said the NSW capital still had incredible price growth over the past four years.

“At the pandemic onset not many people would have predicted that home prices in Sydney would have been this much higher four years later,” she said. “Existing homeowners are benefiting from the equity gains, but its bad news for first-home buyers.”

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Originally published as Where home prices are growing 17pc faster than Sydney