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Regional agents will face an increasingly tight market as a large portion of the population considers relocating outside capital cities, leaving smaller communities confronting a supply crunch.
According to the latest Cotality data, regional Australia’s property market rose by 3.2 per cent over the three months to January, compared to a 2.1 per cent increase in the capital cities.
In its February Regional Market Update, Cotality found that regional values had risen above the 3 per cent mark set in the previous quarter, while capital city values slowed, falling from 3.3 per cent to 2.1 per cent.
Cotality head of research Australia, Gerard Burg, said the data showed a widening separation between the city and regional markets.
“With capital city prices still near record highs and stock levels tight, many households are once again looking to regional Australia for greater value and liveability,” Burg said.
Data showed that regional Western Australia recorded the strongest uplift of any state, up 6.1 per cent over the three-month period, while NSW and Victoria experienced more modest increases, at 2.5 per cent and 2.3 per cent, respectively.
While regional markets have been performing well overall, individual townships have seen most of the growth, with Wagga Wagga leading the way nationally, recording an 8.1 per cent rise over the quarter.
Boasting the strongest-performing market, NSW was also home to the lowest-growth region, with Bowral-Mittagong reporting a 2.1 per cent fall over the quarter.
Burg said regional markets were beginning to build nationwide momentum, from coastal centres to inland hubs and mining-adjacent areas.
“This reflects a renewed movement of people and capital into areas where buyers’ budgets stretch further, and competition for available homes is strong.”
While already in high demand, competition for homes in regional centres is set to intensify, with 37 per cent of metropolitan Australians saying they would consider moving outside capital cities, according to a recent survey by the Regional Australia Institute (RAI).
The survey found that Gen Z were the most interested in making the switch, with 49 per cent considering relocating, driven by cost of living, affordability and returning to nature, the three most significant factors.
Similarly, 41 per cent of Millennials said they would consider relocating to the country, while almost two-thirds of Baby Boomers were not looking for any major location change.
RAI CEO Liz Ritchie said the demographic shift was a direct contrast to the long-standing idea that older metro dwellers looked to the regions as they approached retirement.
“In fact, the desire for the younger cohort to make the shift from our cities is increasing,” Ritchie said.
“The secret is out that regional Australia has a lot to offer young people.”
While regional markets have long been seen as opportunities for those willing to look outside the capital cities, the recent influx of interest has created its own challenges in meeting the necessary supply.
Housing Institute Australia chief executive, industry & policy, Simon Croft, said the increased demand was unsustainable for builders, who were often held back by planning delays brought about by government red tape.
“Regional builders don’t have large workforces or spare cash flow to absorb delays,” Croft said.
“Planning delays are a major constraint on regional housing delivery, with 88 per cent of builders reporting approval times longer than eight weeks, and one in three waiting more than six months before construction can begin.”
“In regional towns, a single delayed approval can stall a business for months, which hits cashflow, local jobs and the number of homes that can be delivered in the community.”
Croft said that while interest in regional towns had the potential to significantly boost their economies, government intervention was needed to ensure these small businesses could keep up with demand.
The survey found 68 per cent of small builders have considered scaling back or closing due to red tape, while 73 per cent do not expect to hire more staff in the year ahead, despite ongoing demand for housing.”
“Regional builders can’t just pull labour from the next suburb; they rely on local trades and apprentices, and when those workers aren’t available, projects slow or stop,” Croft concluded.
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ABOUT THE AUTHOR
Mathew Williams
Born in the rural town of Griffith NSW, Mathew Williams is a graduate journalist who has always had a passion for storytelling. Having graduated from the University of Canberra with a Bachelor of Sports Media in 2023, Mathew recently made the move to Sydney from Canberra to pursue a career in journalism and has joined the Momentum Media team, writing for their real estate brands. Outside of journalism, Mathew is an avid fan of all things sports and regularly attends sporting events across Sydney. Get in touch at
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