Finance Property The five regional areas where property prices will keep rising: Report

The five regional areas where property prices will keep rising: Report

property prices regional
Property prices in Bundaberg (QLD) and Wodonga (VIC) are tipped to rise further. Photo: TND/Getty
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Property prices are on track for a major correction that could wipe billions of dollars from household balance sheets, but new analysis reveals the downturn won’t be felt everywhere.

Buyers agency InvestorKit is tracking five undersupplied regional areas where it thinks values will continue rising in 2022-23 – despite the major banks predicting record falls in national house prices.

InvestorKit founder Arjun Paliwal said the huge migration of city-dwellers to regional hubs during COVID will continue, even as city prices plunge, and that this trend would push prices in some regional areas even higher.

He believes areas like Tamworth in New South Wales, Bundaberg in Queensland and Wodonga in Victoria will be hotspots for strong growth, with buyers unlikely to be deterred by fast-rising interest rates.

“These markets have an aspect of desirability,” Mr Paliwal said.

“Whether its affordability or lifestyle-related, the shifts that have occurred in recent years aren’t things that just switch off overnight.”

Regional property prices boom

More than 43,000 Australians moved to regional areas when the pandemic hit in 2020, with big city lockdowns pushing many households to seek a life away from skyscrapers and traffic jams.

That’s helped regional hubs record huge increases in the value of their housing capital over the past two years.

For example, InvestorKit says property prices have soared 32 per cent in the Bundaberg suburb of Bargara over the past 12 months alone.

In Tamworth, the total value of the housing market has risen by an astonishing 53 per cent over the past decade.

Mr Paliwal said a combination of housing undersupply, rising demand and prices that are lower than those in major capitals have driven the trend.

And he predicts that most of this is set to continue even as the national housing market enters a correction phase amid rising interest rates.

“Even if demand was still the same as pre-pandemic – and not what the pandemic has caused – regional listings are still 30 to 60 per cent below pre-pandemic levels,” Mr Paliwal said.

“These markets all have a clear shortage of housing supply.”

The other factor that will drive prices higher in regional markets will be a lower unemployment rate, with more jobs now available outside the major cities.

On Thursday, the jobless rate fell to a 48-year low of 3.5 per cent.

Mr Paliwal said stronger jobs outcomes in regional hubs, in addition to greater working from home, make regional property far more attractive.