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If you have invested in real estate outside of the city, economic conditions have now caught up with rising prices.
The COVID-induced boom for Australia’s regional housing market has burst, with several regional markets that had the strongest value growth through the upswing now among the fastest declining markets, according to CoreLogic.
The Regional Market Update, which examines Australia’s 25 largest non-capital city regions, shows house values in six of the most popular lifestyle markets recorded falls of -6% or more last quarter, including Richmond-Tweed (-11.7%), Southern Highlands and Shoalhaven (-7.1%), Sunshine Coast (-7.1%), Gold Coast (-6.4%), Illawarra (-6.1%) and Newcastle and Lake Macquarie (-6.0%).
All markets analysed recorded a quarterly decline in house values, with the exception of Central Queensland (0.1%), SA’s South East (0.0%) and WA’s Bunbury (0.0%). House values in Richmond-Tweed (-7.8%), Illawarra (-1.9%), and Ballarat (-0.5%) are also below the levels recorded this time last year, while values across Newcastle and Lake Macquarie are flat year-on-year (0.0%).
Regional NSW also dominated the worst-performing house markets across a range of different metrics. Southern Highlands and Shoalhaven recorded the largest decline in sales volumes (-27.5%) and the highest vendor discounting rate (-4.9%), while the New England and North West regions clocked up the longest time on the market at 43 days.
Interest rate rises, persistently high inflation, and waning consumer sentiment are behind the decline.
But, remember, real estate is a long-term investment where time in the market is more important than what time you got into the market. What is currently being seen is a return to normalcy and, we hope, more stable property prices.