Regional Housing Prices, Rents Hit Record Highs in Australia

A quiet street in Fremantle, Australia on March 28, 2020.Paul Kane/Getty Images

Australia’s housing crisis has deepened as rents and housing prices in regional areas reached record highs in the past quarter.

According to real estate data firm CoreLogic, home values across regional Australia climbed 2.1 percent in the three months to April 2024, the highest quarterly increase in nearly two years.

In comparison, house prices in capital cities rose by 1.7 percent in the past quarter.

“Housing affordability has continued to deteriorate through the start of 2024 for tenants and prospective home buyers alike,” CoreLogic economist Kaytlin Ezzy said

“After falling 5.8 percent between May 2022 and January 2023, regional home values have seen a slower recovery compared to capital city values but have now regained the losses from the downturn to reach a new record high.”

Among the 50 non-capital city areas studied by CoreLogic, 19 markets reported record-high growth.

The top three performing regional areas were in Western Australia (WA): Geraldton (up 8.8 percent), Busselton (up 7.7 percent), and Bunbury (6.4 percent).

In addition, Bunbury had the highest growth across the year at 20.7 percent in the 12 months.

Four of the top 10 markets belonged to Queensland, while New South Wales (NSW), South Australia and Tasmania had one each.

In contrast, Ballarat in Victoria and Port Macquarie in NSW saw the worst performance, with a 2 percent drop in value.

Ms. Ezzy explained why WA and Queensland were ahead of other states and territories.

“The diversity in economic activity across these parts of regional WA and Queensland including agriculture, tourism, ports and mining would be contributing to the strength of these markets, along with their higher levels of interstate migration, relative affordability and low supply levels,” she said.

Soaring Rents

On average, rents soared by 6.3 percent across regional Australia in the past year, up from 4.9 percent from the 12 months to January 2024.

On the other hand, there was a slight drop in rental growth in capital cities from 9.6 percent to 9.4 percent during the same period.

Out of 50 regional markets, 47 saw their rental prices go up, with 37 reporting record growth.

Batemans Bay in NSW experienced the most significant quarterly rise at 6 percent, followed by  WA’s Bunbury (up 4.7 percent), and Queensland’s Sunshine Coast (up 4.4 percent).

In terms of yearly growth, Bunbury again ranked at the top with a 16.4 percent increase.

At the bottom of the list were Nowra-Bomaderry, Maryborough, and St-Georges Basin-Sanctuary. Each reported a drop in rental prices.

Queensland Calls for Migration Cut

While the housing crisis continues to hit, some state governments have urged the federal government to curb the influx of overseas migration to alleviate pressure on housing demand.

Recently, Queensland Premier Steven Miles made a surprise move, backing Opposition Coalition Leader Peter Dutton’s proposal to cut migration intake.

The opposition plans to cut permanent immigration by 25 percent to 140,000 in the next two years if it wins the upcoming federal election.

Mr. Miles explained the rationale behind his support.

“The level of migration we are currently experiencing in Queensland is putting too much pressure on our housing system, so I welcome Peter Dutton echoing my comments,” he said.

According to the Queensland government, the state’s population soared by 144,000 people or 2.7 percent in the 12 months to September 2023, the highest level ever recorded.

Of those people, 88,000 came from overseas, and the remaining were from other Australian states and territories.

“While our Homes for Queenslanders plan will deliver more homes, if migration continues at current levels, we’ll need tens of thousands more homes every year than the industry can build,” Mr. Miles said.

“We urge them [the federal government] to consider moderating migration levels to assist with population.”