Regions give property price slide the slip

House prices in regional areas have held steady against economic headwinds, buoyed by ­demand for beach and country lifestyle.

Lee and Leea Harvey, with Lennox, 8, and Loki, 7, in Barrack Point, Illawarra, where prices are up 12 per cent for the year. Picture: Simon Bullard

House prices in regional areas have held steady against economic headwinds, buoyed by ­demand for beach and country lifestyle.

Prices outside the capital cities slipped just 0.1 per cent between March and July, property ­researcher CoreLogic found. But in capital cities prices were down 2 per cent over the same period.

CoreLogic head of research Tim Lawless said regional prices were likely to dip in coming months before regaining ground.

“I think there will be a shallow fall but not because of demand falling. Even before COVID, there was already a trend towards a sea or treechange,” Mr Lawless said.

“We are seeing some signs of the regional markets losing ­momentum, particularly looking at those further away from Sydney and Melbourne. Regional ­cities tend to lag the capitals but they also don’t have as much ­exposure to migration or have had the same run up in prices.”

Lockdown conditions in Melbourne saw just one in two of the 223 properties taken to auction sell under the hammer last weekend. Sydney continued to produce strong numbers, with a preliminary clearance rate of 71.9 per cent from 632 properties.

Mr Lawless said the changing approach to working from home could help “satellite cities” — those about an hour’s commute from a capital. Illawarra, south of Sydney, has seen an annual price increase of 12 per cent. Barrack Point residents Lee and Leea Harvey couldn’t imagine moving from Illawarra.

The young family recently upgraded to a larger property though Ray White Shellharbour.

“It was never an option not to be around that coastal lifestyle, so when our new property popped up, we decided to move pretty quickly,” Mr Harvey said.

In Launceston, Tasmania, units have proven red hot. ­Median prices have jumped 14.8 per cent in the past year.

Local Harcourt’s director Jeremy Wilkinson said investors hoping to capitalise on demand once the state borders reopened had been a deciding factor.

“Units are selling crazy fast,” he said. “Local investors are more active right now. You can feel momentum building and interstate inquiry levels are still really high. But the pent-up demand is only going to push prices up again. There isn’t enough stock.”

Areas outside an easy commute to a CBD have not enjoyed such strong growth. Mining towns in Queensland in Western Australia are still struggling. Bunbury on the West Australian south coast, recorded the most significant fall in house prices, down 6.3 per cent.