Capital city housing markets tend to receive a majority of the attention when it comes to housing market conditions reporting and this is understandable given it’s where a vast majority of the population lives, and where most housing is located. However, our regional markets are also showing diverse and interesting housing market trends and in some cases we’re seeing stronger capital growth, than in some capital cities.
Some of the most popular (and populous) housing markets outside of the capital cities are located along the eastern seaboard coastline. Broadly, these regions are seeing a bounce back in home values as buyer demand for lifestyle properties ramps up after a long post GFC slump.
High profile coastal markets such as South East Queensland’s Gold Coast and Sunshine Coast, and New South Wales’ Tweed Coast and Byron region are showing a rise in capital gains which is fuelled by a mixture of holiday home buyers, investors and of course retirees who have managed to rebuild their wealth over the six and a half years that have passed since the GFC.
The slump in home values from peak to trough was typically around the 15% to 20% mark, however across these regions most indicators are now looking very positive. Dwelling values are moving closer to their previous record highs, while in some areas such as Byron, values have regained a new historic high over recent months. In fact, of these coastal markets, Byron is showing the strongest conditions with house values up 7.8% over the past twelve months, and almost 23% over the past three years.
Demand for properties in lifestyle regions isn’t limited to the south east corner of Queensland or Northern New South Wales. Cairns, in far north of Queensland, is well into a recovery trend, and even Margaret River in Western Australia is bucking the softer conditions evident across most of the state to post stronger housing market conditions over the past couple of years.
Several factors are likely to continue to drive better housing market conditions across the lifestyle markets of Australia such as the lower Australian dollar which is encouraging more domestic tourism and benefiting coastal markets. Overseas tourism is also having a positive influence due to lower exchange rates. More tourists means more than just larger numbers of holiday makers and higher occupancy rates; it means more jobs and a more vibrant retail sector as well as more housing demand from workers involved in the sector.
Additionally, the wealth created in booming housing markets such as Sydney and Melbourne is likely to support higher levels of demand across the lifestyle housing markets as improved equity positions are being used to support buyers purchasing into coastal markets for both second / holiday homes and investment properties.
Similarly, retirees and prospective retirees are now in much better financial positions than they were after their wealth was significantly eroded during the GFC, and subsequent years of share market volatility. The much touted ‘sea change’ and ‘tree change’ phenomenon is once again likely to ratchet up a gear as the more mature aged cohorts look to offload their city residences as they wind down.
Jason Thomson | Mortgage Adviser and Finance Broker | Smartline Cairns