A slowdown in tourism and migration combined with the lingering effects of the GFC are negatively impacting some regional markets, according to the latest RP Data Property Pulse.
“A slowdown in migration has also had a negative impact on market conditions, especially in the sea change areas where there has been a significant drop in migrants moving to coastal regions,” RP Data’s Cameron Kusher said.
“Further analysis of the regional data found that based on performance, values for detached houses were quite varied over the past year. Half of the regions surveyed reported value falls, while the remainder actually recorded an increase.”
Across the regions, the performance of these markets varied from a 5.2 per cent decline in values across the far north region of Queensland (which includes areas such as Cairns, Atherton and Cassowary Coast) to a 7.4 per cent increase in values within the mid-north coast region of New South Wales which includes major areas such as Coffs Harbor and Port Macquarie.
Mr Kusher said that although most regions recorded growth over the past five years only, the mid-north coast and Barwon recorded average annual growth in excess of five per cent per annum over the period.
These weaknesses are further highlighted by the fact that each region has recorded a decline in house values since the market peak.
Queensland regions have typically recorded the largest declines with values down 12.4 per cent from their peak on the Gold Coast and 11.4 per cent in the far north region.
Regional housing markets are largely dominated by detached houses as opposed to units. As a result, mid-north coast and Wide Bay-Burnett do not have enough unit sales to calculate reliable statistics.
Nevertheless, Mr Kusher said that the remaining regions have all seen unit values fall over the past year with the south west region of WA the one exception recording a large 12.1 per cent increase in unit values.
“With an ongoing weakness in the tourism sector and an excess supply of properties for sale in select regions coupled with a lack ‘sea changers’ returning these markets, we don’t expect an immediate turnaround in these markets over the coming year,” he said.