Regional housing markets have quietly pulled ahead of the capitals – and the gap is starting to widen.
Cotality’s February Regional Market Update has revealed that regional Australian dwelling values rose faster than capital city markets in the three months to January, marking a decisive shift in momentum as affordability pressures and renewed migration reshape where buyers are willing and able to purchase.
Regions outpace capitals
Across regional Australia, dwelling values climbed 3.2 per cent over the quarter, outstripping a 2.1 per cent rise across the combined capitals.
This represents a reversal from the previous three‑month period to October, when capital city values grew by 3.3 per cent compared with 3 per cent in the regions, signalling that the balance of power has swung back outside the metro markets.
Almost three in five of the country’s largest regional Significant Urban Areas recorded faster growth than in October, underscoring the broad nature of the upswing.
Cotality’s head of research for Australia, Gerard Burg, said the results highlight a deepening divergence between city and regional markets as buyers chase value away from the capitals.
“Affordability remains a powerful driver of buyer behaviour. 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,” he said.
WA and Wagga Wagga set the pace
Regional Western Australia has emerged as the strongest state‑level performer, with home values jumping 6.1 per cent over the three months to January, up from 4.9 per cent in the previous quarter.
Within Western Australia, Albany, Kalgoorlie‑Boulder, and Busselton all posted quarterly gains of 7 per cent or more, while Bunbury and Geraldton also exceeded the already-strong state average.
At the other end of the spectrum, Broome and Port Hedland recorded more modest rises, pointing to differing conditions even within resource‑exposed markets.
The standout individual market nationwide was Wagga Wagga in regional NSW, where values surged 8.1 per cent over the quarter.
That places the inland city well ahead of Sydney’s recent pace and reflects the broader appeal of larger regional hubs that offer employment, infrastructure, and relative affordability.
“We’re seeing momentum build across a wide range of regional markets, from inland hubs to coastal centres and mining adjacent regions,” Burg said and noted that the breadth of the upturn had extended well beyond traditional sea‑change favourites.
Mixed picture for NSW and Victoria
While the national story is one of regional strength, not every market is sharing equally in the gains.
Growth in regional NSW and Victoria was more subdued, at 2.5 per cent and 2.3 per cent respectively, with both states showing little change in quarterly pace compared with October.
They were also the only states to record localised price falls – including Bowral-Mittagong, Warrnambool, and Batemans Bay – which each slipped into negative territory over the period.
Burg said weaker selling conditions were evident in some of the softer pockets.
“Selling conditions in the two NSW markets were relatively weak, with time on market close to 70 days. This suggests that the local supply-demand balance was looser than in most other regional localities,” he said.
Tight selling conditions signal strong demand
Across regional Western Australia, properties are selling in a median of just 20 days, while in regional Queensland, the median is 24 days, with average vendor discounting sitting at around 3.3 per cent.
Albany has the shortest selling time in the country at only 10 days, while a dozen Significant Urban Areas across Western Australia and Queensland recorded median selling times below 20 days, highlighting intense competition for limited stock.
According to Burg, the rapid sales and limited discounting speak to a renewed flow of people and capital into regional areas.
“This reflects a renewed movement of people and capital into areas where buyers’ budgets stretch further and competition for available homes is strong,” he said.
[Related: National house prices accelerate despite rate hike spectre]
