The property market in Australia is experiencing a fascinating shift, with regional cities outshining the capital cities in terms of growth and performance. This trend is particularly intriguing, as it challenges the long-held assumption that regional areas lag behind their metropolitan counterparts. Kane Dury, the principal of Discover Buyers Agency, is a key figure in this narrative, offering his insights and analysis on the matter.
Dury argues that the current downturn in the national property market is largely a result of the softening in Sydney and Melbourne. However, when we zoom out and examine the regional data, a different picture emerges. Regional Australia is not just holding its own; it's outperforming the capitals in many aspects. This includes price stability, with regional areas recording no change in June, while regional NSW saw a positive 0.1 per cent growth.
The PropTrack home price index further supports this claim, showing that while the capital cities experienced a 0.4 per cent decline, regional markets have been the stronger performers. This is particularly evident in the affordability factor, with the strongest markets offering the greatest affordability. Dury emphasizes that the regions are not just lagging behind; they are now leading the way, challenging the old assumption that they are always behind the cities.
In his analysis, Dury highlights several regional cities that are offering strong value, rental demand, and economic diversity for buyers in the $700,000 to $1 million bracket. These cities include Toowoomba, Townsville, and Mackay in Queensland, as well as Geelong, Bendigo, and Ballarat in Victoria. He also mentions Wagga Wagga in NSW as a strong multi-engine regional city.
One of the key factors driving this regional surge, according to Dury, is the severe rental shortages in the regions, with vacancy rates around 1.5 per cent. This, coupled with affordability refugees priced out of the capitals and sustained internal migration, is creating a strong demand for housing in regional areas. Additionally, the chronically constrained new housing supply in these regions is further fueling the demand.
Dury's commentary also highlights the importance of local-level indicators, such as vacancy rates, days on market, and the ratio of owner-occupiers to renters, in revealing opportunity. These indicators provide a more nuanced understanding of the market compared to national-level data. He argues that a suburb with a low vacancy rate, quick sales, and a high proportion of owner-occupiers is a better indicator of market health than any national number.
In conclusion, the property market in Australia is undergoing a significant transformation, with regional cities taking the lead. This shift is driven by structural forces, including rental shortages, affordability factors, and internal migration. As the market continues to evolve, it is essential to consider the regional perspective, as it offers a more comprehensive understanding of the opportunities and challenges within the property sector.
