Despite witnessing consistent growth in regional housing values over the past five months, a recent analysis of year-on-year performance reveals that many markets are still grappling with the impact of high interest rates and a return to pre-COVID migration patterns.

The latest quarterly update from CoreLogic, focusing on Australia's 25 largest non-capital city regions, sheds light on the state of these markets. Surprisingly, 18 of these areas experienced a decline in annual house values up to July 2023.

However, there were exceptions. The South East region of South Australia, encompassing Kangaroo Island, the Fleurieu Peninsula, and the Limestone Coast, displayed impressive annual growth of 9.1%. The spotlight also turned to Queensland, where Central Queensland (2.7%), Mackay–Isaac–Whitsunday (1.2%), Toowoomba (0.7%), and Cairns (0.5%) boasted solid market capital growth.

Conversely, some areas struggled. The Richmond-Tweed market in NSW faced a substantial -20.4% decline, while Victoria's Ballarat (-11.2%) and Geelong (-10.4%) recorded double-digit declines in house values over the year.

Despite the upswing in regional Australian dwelling values, they remain -5.6% below the levels seen at this time the previous year, with sales volumes also experiencing a notable -21.3% decrease.

While regional markets are gradually recovering, capital city markets are leading the value growth charge, indicating a more moderate demand for housing in regional Australia as migration trends normalize.

It's been a challenging year for regional markets, with the ones experiencing growth often being those with greater affordability, rural locations, and lower debt levels.

In terms of housing sales, every region witnessed a decline over the past 12 months. While Townsville showed the smallest drop at -11.3%, six regions experienced declines of over -30%, with five of them located in NSW.

As the market picks up its pace, we find ourselves at a crucial juncture. Stay tuned for more insights and updates on the evolving regional housing landscape.