Some key regional property markets are declining, particularly in NSW and Victoria, but overall the sector has still comprehensively outperformed combined capital city markets since COVID-19 hit in early 2020.
Fresh data from CoreLogic shows combined regional property values rose 52.5 per cent from March 2020 to July 2024 compared with a 33.4 per cent increase across all capital cities.
Regional quarterly growth slowed from 2.2 per cent in April to 1.3 per cent in July. Capital city price growth also eased over the same period, from 2 per cent to 1.8 per cent.
CoreLogic economist Kaytlin Ezzy says 20 of the 50 regional markets it monitors recorded property value declines since May, compared with eight the previous quarter.
"As the high interest-rate environment continues to put pressure on household balance sheets, it's likely we'll continue to see values and rents moderate in the coming months," Ms Ezzy says.
On the rise
Bucking the trend were coastal hubs in Queensland and Western Australia.
Property values in Gladstone rose 9 per cent during the quarter, while Townsville recorded gains of 8 per cent.
In south-west Western Australia, Busselton and Bunbury were up 7 per cent while property prices in Geraldton, 400km north of Perth, rose 6 per cent.
"These regions also recorded annual growth exceeding 20 per cent," Ms Ezzy says.
On the flipside were price declines across 14 NSW markets and six in Victoria.
Coffs Harbour fell -3.8 per cent, Orange was down -3.1 per cent and Ballarat came off -3.4 per cent.
Jason Birch, Director of PRD Ballarat, says prices in the city of 100,000 have been trending down since reaching a post-COVID peak in mid-2022 and are suffering from an oversupply of stock.
Median house prices peaked in May 2022 at $610,000, rising dramatically from $441,000 in March 2020, an increase of 38 per cent.
They're now at $526,000, still 27 per cent more than they were in July, 2019.
Crowded market
"Ballarat has an oversupply of stock which I don't think is matched anywhere in regional Victoria and because of this you are going to see downward pressure on prices because there's isn't that buyer tension," he says.
Prices and affordability are other big issues facing Ballarat.
"If you're priced right, you'll sell in this market. There is a hangover from COVID that [some vendors think] the COVID prices are still here but unfortunately, they're not."
Orange, in NSW's central west, has been one of inland Australia's strongest performers but the market is now starting to cool with time on market increasing over last year and now at now at 65 days.
Prices have retreated from $672,000 in mid-2022 and the median is now $615,000.
Agent Hugh Britton from Peter Fisher Real State says buyer enquiry is still "pretty good" but there's no longer any urgency to buy.
"Over the last two months there's been more investors come back into the market and people seem to have a bit more interest in properties that are ready to go rather than stuff that needs work," says Britton.
