CoreLogic Reports Record-High Rents Across Australia’s Biggest Regions as WA and Queensland Top the List
The allure of escaping the high cost of living in Australia’s capital cities for more affordable regional areas is diminishing, as rental prices in nearly every part of the country reach record highs. CoreLogic, a real estate analytics firm, has found that rents in three-quarters of Australia’s largest regional areas are now higher than ever.
Significant Increases in Regional Rent
- Batemans Bay, NSW: Experienced the most substantial increases over the past three months, with rents rising by $32 per week, a 6% hike.
- Bunbury, WA, and Sunshine Coast, QLD: Both regions saw rental prices increase by over 4% recently, with Bunbury witnessing a staggering 20% rise over the past year.
- General Trend: No major regional centre recorded a significant decrease in rental prices. The slight declines were minimal, with Karratha in WA falling by 0.8% to an average rent of over $1,000, and Maryborough in QLD dropping by 0.2% to $478.
Factors Driving the Rental Surge
CoreLogic economist Kaytlin Ezzy highlighted that rental prices rarely decrease unless driven by an economic downturn. The current pace of rent increases is unusual compared to the pre-COVID era, with rents rising at about 6% annually across regional markets, whereas they typically increased by only 2%.
High Interest Rates
Persistent high-interest rates, hovering above 4% since their steady rise from 2022, are exerting pressure on both renters and investors. Investors, facing higher mortgage costs, are likely passing some of these expenses onto renters.
House Prices in Regional Areas
CoreLogic’s data also examined house prices in Australia’s major regional areas, revealing significant growth in Western Australia:
- Geraldton, WA: House prices surged by 8.8% over three months.
- Busselton, WA: Increased by 7.7%.
- Bunbury, WA: Rose by 6.4%, with homes selling fastest at an average of 14 days.
Queensland: Regions such as Rockhampton, Gladstone, Gold Coast-Tweed, and Townsville featured prominently in the top 10 for quarterly growth. Conversely, New South Wales and Victoria had minimal representation.
Underperforming Areas: Ballarat (outside Melbourne) and Port Macquarie (NSW Mid North Coast) experienced declines in house prices, with Ballarat down 2% over three months and 4.2% over the past year, averaging just over $540,000.
Market Dynamics
Ms. Ezzy pointed out that while most areas suffer from a housing shortage, regional Victoria has 15% more homes on the market than average. Despite cost-of-living concerns, high interest rates, and low consumer sentiment generally correlating with a falling market, the current mismatch between supply and demand is driving prices up.
Western Australia Leading Growth: WA properties are outperforming other regions, with Queensland following closely behind. Notable growth in Queensland includes regions like Gladstone, Emerald, and Rockhampton, where property values have surged by about 16% over the past year.
Contradictory Trends: Despite several economic indicators suggesting a potential market decline, the persistent demand-supply imbalance is propelling property values higher.
Conclusion
The soaring rental and property prices across Australia’s regions highlight the growing challenges in the housing market. While some regions experience remarkable growth, affordability remains a critical concern, exacerbated by high interest rates and a consistent demand-supply mismatch. As the market continues to evolve, stakeholders must balance profitability with the pressing need for affordable housing solutions.
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