Western Australia leads national growth, with tight supply and strong migration sustaining regional momentum
Regional Australia recorded dwelling value growth of 3.3% in the three months to April, more than triple the 1.1% rise seen across the combined capital cities, according to data from Cotality's Regional Market Update.
Three in five of the country's 50 largest regional Significant Urban Areas (SUAs) experienced a slower pace of growth this quarter, yet regional markets continued to outperform their capital city counterparts overall.
Regional Western Australia posted the strongest quarterly growth nationally at 5.9%, up from 5.6% in the prior quarter. Busselton led all SUAs with a 7.5% quarterly gain, ahead of Albany (7.2%), Geraldton (6.8%), and Bunbury (5.8%).
"We are seeing a clear loss of momentum at the national level, but regional markets are proving more resilient than their capital city counterparts," said Gerard Burg (pictured right), head of research for Australia at Cotality.
"Affordability remains a central driver, with internal migration patterns continuing to favour regional areas where buyers can find greater value and a different pace of life.
"The strength in southwest WA is particularly notable. Busselton's growth is occurring despite it having a higher median value than Greater Perth, which suggests this performance is being driven by more than just affordability. We're seeing a significant spillover of demand from the Perth market into nearby regional hubs."
Queensland also recorded solid conditions, with Townsville, Maryborough, and Toowoomba among the stronger performers. Tasmania saw renewed activity driven by Burnie-Somerset and Launceston. Parts of New South Wales and Victoria recorded localised falls, with Bowral-Mittagong down 1.2% and Albury-Wodonga easing 0.2%.
Supply and demand imbalances were most pronounced in Western Australia and Queensland, where median selling times stood at 17 and 24 days respectively — the shortest in the country. Albany recorded the fastest selling time nationally at 10 days, followed by Busselton at 12 days.
New South Wales markets recorded the weakest selling conditions. Batemans Bay had a median time on market of 66.5 days, with Bowral-Mittagong at 65 days, reflecting relatively loose supply-demand dynamics in those areas.
Regional rental growth of 1.8% marginally trailed the 2.1% recorded across the capital cities this quarter. The regional vacancy rate held at 1.9%, up slightly from 1.8% in January.
"Rental affordability continues to be a challenge for regional residents," Burg said. "With vacancy rates as low as 0.4% in markets like Lismore and 1% in places like Geraldton and Albany, the stock of available homes simply isn't keeping up with the demand from internal migration."
Gross rental yields in regional areas held steady at 4.2% in April, above the 3.6% recorded across the combined capital cities. Kalgoorlie-Boulder remained the highest-yielding major regional market at 8.1%.
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