Following the diminishing performances of the big property markets of Sydney and Melbourne in the past months, a lot of investors have lost confidence in real estate as a wealth-creation asset.
Research released by Corelogic has analysed the largest gains and biggest falls in dwelling values across Australia over the 12 months to November 2018.
While a foreign buyer exodus, oversupply of stock, and tighter lending conditions, have weakened market conditions across the country, the regional housing markets have strengthened with improving economic and demographic conditions supporting double digit growth.
Regional markets, where property values have been stable, are now showing signs of outpacing some of the nation's strongest markets with some regions showing impressive 15 per cent increases in median dwelling prices over the year.
Top 10 largest annual increased in dwelling values
|South East Coast||TAS||16.3%|
|Hobart - North West||TAS||14.3%|
|Meander Valley - West Tamar||TAS||13.8%|
|Gippsland - South West||VIC||13.4%|
|Sorell - Dodges Ferry||TAS||10.9%|
While Sydney and Melbourne have been notorious investment hotspots over the years, the emerging trends are leaning towards properties for sale in regional areas in Tasmania and Victoria.
Locations outside the eight capital cities, both culturally and economically diverse, are now acting much like big-city suburbs without the off-putting sky-high prices.
Tasmanian and Victorian regional areas were prevalent in the growth rankings, indicating a strong shift away from capital cities, where house prices have plummeted across the year.
A total of 15 regions nationally recorded double-digit value growth with 10 of the top 15 located in Tasmania.
Tasmania’s South East region recorded the strongest value growth over the past year with dwelling values increasing by 16.3 per cent.
Top 10 largest annual declines in dwelling values
|Outback - South||QLD||-15.6%|
|Dural - Wisemans Ferry||NSW||-14.2%|
|Pennant Hills - Epping||NSW||-14.2%|
|Stonnington - East||VIC||-14.1%|
|Darling Downs (West) - Maranoa||QLD||-14.0%|
|Whitehorse - West||VIC||-12.4%|
Regions topping value declines over the past year overwhelmingly and expectedly dominated by New South Wales with 28 regions within the top 50 located in Sydney, and four locations in the top 10.
“This reflects the fact that as value growth conditions have weakened nationally, the slowdown has been much more rapid across the capital city markets,” Corelogic head of research, Cameron Kusher said.
The outback-south region of Queensland recorded the largest dropping in value by 15.6 per cent.
The region, which includes major towns like Longreach, Charleville and Cunnamulla, was also the only region in which values have fallen by more than 15 per cent over the past year.
According to analysts housing prices in Sydney and Melbourne are expected to fall around 15 to 20 per cent from peak to trough, with potential spillover to Canberra, Brisbane, and Adelaide.
The predictions could spell trouble for investors and homeowners, with many now losing up to $1,000 per week in value in major cities and stability unlikely to be seen until early 2020.
“Although the sharp falls of this year, especially in Sydney, are unlikely to continue at their pace over the next year, it would not be a surprise to see that in 12 months’ time additional regions across the nation have recorded annual value falls,” Kusher said.
“More affordable regional housing markets are expected to hold up better in terms of growth than the more expensive and weaker capital city housing markets.”