Resilient regions hold their own as cities take a hit

Affordable regional areas and smaller capital cities have proven to be more resilient than pricier metropolitan suburbs amid the property market downturn

‘A long-term investment’ … Jarrod and Gabrielle Walsh with their two daughters Rayne, 6 and Aspen, 2, at their home in Adelaide. Picture: Morgan Sette

Those who fled the big smoke during Covid for a life in the country have ducked the property downturn, with prices holding strong in regional areas.

Despite a steady fall throughout last year in Brisbane, Sydney and Melbourne – with prices sliding as much as 14 per cent – the housing boom rolls on in pick-of-the-bunch regional areas and some outer-ring suburbs.

The property market rocketed from 2020 to early 2022 due to high demand and record low interest rates. Eight interest rate rises last year took their toll, but the price falls are not being felt evenly, according to new PropTrack data.

PropTrack economist Angus Moore said certain areas, including regional NSW and Victoria, had been largely unaffected.

“I think there are two things going on there; one is the after-­effects of Covid-19 – the preference shifts that happened during the pandemic to people wanting more space being less tied to the inner city,” he said.

“The other thing that we’re seeing is that some of these regional areas are a bit more affordable than places like inner-city Sydney and inner-city Melbourne. We’re probably starting to see some buyers having to look outside of where they might have otherwise, simply because they can’t afford those inner-city areas anymore.”

The Hunter Valley, Murray, and Riverina regions of NSW, Shepparton and the northwest regions in Victoria, and Toowoomba and Townsville in Queensland are among the most resilient, with properties in these areas remaining at peak prices as of November.

While December saw Adelaide falling from its peak, with a 0.18 per cent decline, Mr Moore added that smaller capital cities had remained resilient to national price falls due to high demand and relatively low supply.

“The other thing we’re seeing is, as we went through the pandemic, that smaller capitals – particularly, at the moment, Adelaide – are holding up a little bit better than some places like Melbourne and Sydney,” he said.

“One of the things that has changed in Sydney, Melbourne and Canberra is that there’s now more properties for sale than has typically been the case over the past decade.”

Ray White North Adelaide principal Rachel Lawrie said part of Adelaide’s property market resilience was due to the city’s affordability as prices remain com­par­atively low to other capitals.

“Western suburbs do exceptionally well; people want that ­locality to the beach and there are some great schools,” she said. “But I think we’re seeing it more going to have median range suburbs, anything in that $450,000 to $750,000 price range.”

The market across South Australia was booming, with many buyers drawn in by the state’s alluring lifestyle and investment opportunities. “People are buying in South Australia because they see the value in our lands – like where can you get a block of land like at a ­marina in Port Lincoln for $190,000 to $250,000, and you’re right on the water with your own beachfront and waterfront – you can’t get that anywhere else probably in Australia,” Ms Lawrie said.

Adelaide property owners Jarrod and Gabrielle Walsh, who have just bought a home for their growing family, said the lack of volatility in Adelaide made purchasing difficult as properties were tightly held in the city.

“It’s about long-term investment for us, and I think that’s why the Adelaide market is so tightly held; people are mainly buying homes long term, or long-term investment properties, because it’s not like you can buy a property and double your money in a couple of years,” Ms Walsh said.