NSW regional towns where house prices dropped up to $100,000 in a year

House values have fallen by up to six figures in pockets of regional NSW too far-flung to commute to Sydney for work, as higher interest rates limit how much money potential buyers can borrow.

Industry players reported weaker demand for the more expensive homes in their markets that now require higher mortgage repayments than in the recent past.

House values have fallen in the Gundagai area.Credit:

The median house value in Beechwood, outside Port Macquarie, fell $104,000 last year (10.8 per cent) to about $860,000, CoreLogic figures show.

In Springvale, an outer suburb of Wagga Wagga, values fell almost $99,000 (9.6 per cent) to a median $934,000. In Gobbagombalin, on the other side of town, values fell 9.7 per cent.

Elsewhere in the Riverina, values dropped in Gundagai (9.2 per cent) and South Gundagai (11.8 per cent). The deepest fall in percentage terms was in Coolah in the central west, down 16 per cent to a relatively affordable median house value below $239,000.

PRD Real Estate chief economist Diaswati Mardiasmo said interest rates were taking a toll especially across the more expensive parts of the regional NSW market.

“Normally the more high-end, premium-priced blue chip houses or units are usually the ones that take the first hit,” she said.

“They’re the ones that will command the most amount of deposit and the highest amount of loan repayments.”

So home owners consider trading down to slightly more affordable properties where the monthly mortgage repayments are not as high, she said.

“When it comes to tougher times or when there’s a higher interest rate it’s always the top end of the market that suffers first, that gets hit first, because it can be quite a jump in terms of deposit and loan repayments.”

She added that buyers in regional NSW are also chasing infrastructure, convenience and lifestyle, and looking for areas with good transport. Largely absent from the list of deep price falls were commuter-belt areas where sea-changers can work from home but travel to their Sydney office a couple of days a week.

While prices fell most in Coolah, between Dubbo and Tamworth, it remains affordable by Sydney standards.

Shelley Piper, principal at Piper Real Estate Coolah, has noticed a shift in the market and has seen higher-end homes taking longer to sell than entry-level properties.

“I would say the market is slower but properties are still selling,” she said. “It’s a case-by-case basis, a property sold in a matter of days, which is a bit unheard of.

“There’s a big gap in values between the top-end properties and the bottom. Properties on the higher end, around $590,000, take longer than those on the lower end, around $160,000.”

She said buyers are largely people moving to the area and finding it very affordable.

In Tocumwal, on the border with Victoria, Rob Crow & Co Real Estate selling agent Peter Taylor has noticed a similar trend.

“There’s softness at the top of the market [over $600,000], but the lower-end properties [under $500,000] are quite steady,” he said.

“We typically have two new listings a week and on average they could take 30 to 60 days to sell.”

He said less than 10 per cent to 15 per cent of their buyers are Sydneysiders and Queenslanders moving to the area.

“It’s a bit of a forgotten area of town for Sydneysiders,” he said.

In Gundagai, Ray White Tumut’s Shaun Ryan said higher interest rates have prompted some owners to sell up.

“There’s still a demand for properties but interest rates have forced people to sell. We’ve found people are offloading their investment properties,” he said.

“I would say there are far more properties than buyers but sales are OK. Properties are taking far longer to sell.”

He said most homes in the area are selling for about $400,000 to $600,000, but acreages can fetch $1 million or more.

“There are a lot of buyers from the Camden and Picton area as they’re seeking that rural lifestyle. We’re also seeing buyers from the South Coast and Wollongong.”