An open house sign and an overhead picture of a regional Australian property market. The booming local real estate market may be gone. Australians who saw the outbreak as a chance to test the local real estate market may regret doing so as prices fall.
Recent data from CoreLogic indicates that the regional housing bubble caused by COVID-19 has popped.
According to CoreLogic’s Regional Market Update report, the regions with the most expansion during the boom are currently experiencing the most contraction.
In six of the most sought-after lifestyle markets, home prices dropped by six percent or more in the previous quarter, according to the survey.
For example, in Richmond-Tweed, the decline was 11.7 percent. In Southern Highlands and Shoalhaven, 7.1%. On the Sunshine Coast, 6.4%; in Gold Coast, 6.1%; in Illawarra, 6.1%; and in Newcastle and Lake Macquarie, 6.1%. (down 6 percent).
Except for Central Queensland (up 0.1%), the South East of South Australia (no change), and the Bunbury region of Western Australia (-0.1%), all of the markets studied saw a quarterly fall in home prices (no change).
NSW’s lowest-performing real estate markets were in the state’s rural areas. The New England and North West area had the most extended stay on the market at 43 days, while the Southern Highlands and Shoalhaven region saw the most significant drop in sales volumes (down 27.5%) and the highest vendor discounting rate (down 4.9%).
Over the three months ending in October, 87.8% of the regional house and unit markets analyzed by CoreLogic experienced a quarterly reduction in values, expanding the scope of the price drops previously witnessed across the more expensive capital city and regional markets.
According to Ezzy, “the pace of value losses throughout regional Australian property markets accelerated due to consecutive interest rate hikes, persistently rising inflation, and weakening consumer sentiment.”
It’s hardly shocking that home values fell the most in the Richmond-Tweed area. The median value of a home increased by almost 50% throughout the COVID period, reaching over $1.1 million.
Since April, home prices in the area have dropped by about 16 percent due to this year’s floods and seven consecutive rate hikes.
In South Australia, home prices increased by 21.7% in the South East over the previous year, 20.5% in the Riverina, 20.4% in New England and North West, and 0% in the Western area (19.8 percent).
Despite the rise in interest rates, Ezzy predicted that the regional markets in Australia would continue to decline in value.
Positively, “we have yet to see substantial indicators of an increase in distressed listings,” Ezzy added. Thus the lack of a traditional spring listings rush is encouraging.
