As property in Melbourne and Sydney reach new record levels, the median stratified house prices in regional Victoria and NSW are also largely on the up, a new report has found.
The first Domain Regional House Price Report, which monitors the median house prices in the major regions of NSW, Victoria, and Queensland for the quarter ending September 2016, has found that rising median house prices in the country’s two major cities have led to a knock-on effect in their respective regions.
For example, in Victoria, median house prices in Ballarat, Greater Bendigo, Greater Geelong, and Wodonga have all increased since September 2015, with Greater Geelong seeing median house prices reach a high of around $415,000.
Domain chief economist Andrew Wilson attributes the strong local market in Greater Geelong to “strengthening local economy and significant affordability advantages compared to Melbourne”, and that in Wodonga, where house prices have risen by 10.9 per cent year-on-year to $316,000, to “strong long economy stimulating market activity and price growth”.
Likewise, the median house price in Ballarat has increased by 1.5 per cent over the quarter and 6 per cent over the year, to around $310,000, whereas median house prices in Greater Bendigo now sit at $328,000.
However, Mr Wilson notes that while Greater Bendigo house prices rose by 2.5 per cent year-on-year, the last quarter saw prices tumble “sharply” by three per cent, partly due to “recent weakness in Bendigo’s local economy” and as a result of “local market activity level[ling] out after a period of solid growth.”
Over in NSW, median annual house prices rose in all regions except Albury and Wagga Wagga, where asking prices fell by 1 per cent (to $297,000) and 2 per cent (to $313,750) respectively. While Wagga Wagga saw the sharpest quarterly decline of all the major NSW regions (of 4.9 per cent), Albury is now the most affordable of all NSW regional cities.
In descending order, the highest median house prices are in Ballina (rising 12.2 per cent over the year to $550,000), Newcastle (up 9.3 per cent to $530,000), Tweed (13 per cent higher at $520,000), Coffs Harbour (rising 5.8 per cent to $440,000), Orange (up 0.4 per cent to $350,500), Dubbo (up 2.9 per cent on last year to $355,000) and Lismore (up 0.7 per cent to $340,000).
In Queensland, house prices are doing less well, with the Gold Coast and Sunshine Coast the only major regions that have seen increases in median house prices.
“Following a year of sustained growth” the median house price has risen by 3.1 per cent to $562,000 in the Gold Coast, while the Sunshine Coast saw asking prices rise 4.9 per cent to $545,000 to the year ending September 2016.
However, despite decreases in annual median house prices in Cairns, Rockhampton and Mackay, Mr Wilson says that quarterly price growth in these regions are “positive signs” for the markets there.
Townsville has fared less well, with median house prices falling to $330,000 down by 2.9 per cent over the quarter and 4.3 per cent over the year. Indeed, Mr Wilson says that there is “no clear indication of it flattening out in the recent sustained period of weakening prices growth”.
‘Two-speed property market’
The pull of Melbourne and Sydney may be pushing up prices in their state regions, but Mr Wilson has suggested that Australia is in the grips of a “two-speed property market”, with some capitals hitting record high prices while other markets weaken.
“Low interest rates, increased investor activity, strong migration and robust local economies have fuelled rising buyer momentum in both the Sydney and Melbourne markets. A relative shortage of listings and increased interest from investors will continue to drive price growth in these capitals for the remainder of 2016,” explained Mr Wilson.
“Prices fell marginally in Adelaide and Brisbane following recent positive results and house prices continue to decline sharply in both Perth and Darwin. Local economic performance will determine whether there is a return to price growth in these capitals over the remainder of the year.”