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Staff Reporter
The largest declines in residential property values have occurred in unit dwellings across coastal and lifestyle markets, according to RP Data.
Head of research and analytics, Tim Lawless said there were a number of factors that had caused values to fall.
Unit dwellings within the lifestyle regions generally showed a larger proportion of investor owners and holiday or second home owners.
“In times of financial distress, the investment property or second home will often be the first to be divested,” he said. “A large number of properties were added to the market in these areas at a time when buyer demand was virtually non-existent.”
In addition, unit dwellings in those markets were more reliant on short-term holiday rentals or long-term rental demand from service workers associated with the tourism and retail sectors, which have been weaker since the global financial crisis (GFC).
Mr Lawless said the markets were prime beneficiaries of the ‘sea change’ phenomenon, where retirees or prospective retirees were driving migration and housing demand in those locations.
“I would expect that this trend (and hence housing demand) has slowed substantially as many retirees and prospective retirees look to rebuild their wealth post-GFC, before embarking on their sea change,” he said.
Buying opportunities for individuals who aspired to own a holiday home or relocate to one of the lifestyle markets were much more affordable.
The largest growth in value occurred across regional markets, particularly those associated with the mining sector.
The Pilbara region in Western Australia recorded the highest rate of capital gain at 19.8 per cent per annum over the past five years.
Mr Lawless said, “This is clearly a spectacular return, however many of these mining regions are now showing a substantial slowdown in buyer demand as the resources sector transitions out of a very strong phase of infrastructure investment and growth.”
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