Australia’s regional property market is undergoing a major shift, with combined regional median house values growing 1.6% faster than in the combined capital cities. With rents surging by 17% annual growth in some areas, regional Australia is quickly becoming a hotspot for both investors and homebuyers. So, what’s driving this trend?
The Great Migration: Regional Relocation
Australians are choosing regional living over city life at an increasing rate. The latest Regional Movers Index showed a 23.4% rise in net regional migration (12 months to September 2024), marking the fifth consecutive increase and highest growth since March 2022.
Where are people moving?
- Coastal Local Government Areas (LGAs) remained top choices, with the Sunshine Coast, Greater Geelong, and Lake Macquarie leading net internal migration figures.
- Inland LGAs like Maitland and Moorabool were also seeing strong net migration inflow, suggesting new opportunities.
The map below shows where Australians were relocating, highlighting the top five regional LGAs in each state that attracted the most migrants. The rankings were determined based on each LGA's share of net regional migration for the 12 months to September 2024.
Investor Insight: Strong net migration patterns often signal rising demand for housing, putting upward pressure on property prices if supply remains the same.
Regional Hotspots: Where Property Prices Are Booming
According to CoreLogic Data, regional markets are showing stronger annual growth compared to capital cities, with median house values climbing 5.8% and unit values up by 6.1%. This stands in contrast to the more subdued 4.2% annual rise in house values and 2.6% increase in unit values across capital cities.
Here’s how the top regional LGAs per state performed from September 2023-2024:
Rental Market Boom: Record Growth in Regional Areas
Perhaps the most striking trend is weekly rents, with some regions seeing exceptional increases:
What’s driving rental price increases in regional markets?
- High demand, low supply: Many regional markets are experiencing strong population growth, with rental properties in short supply.
- Affordability: City-dwellers are seeking more affordable living options, driving up competition for the more affordable rentals.
- Infrastructure improvements: Government investments in transport and connectivity are making regional living more accessible and desirable.
Infrastructure Investment: A Game-Changer for Regional Growth
The Federal Government is supporting regional expansion with major infrastructure projects, further fuelling demand for regional real estate.
Key investments include:
- $605.7 million for Northern Australia road upgrades.
- $177 million for Warrego Highway improvements.
- $137.5 million for the Nelson Bay Road project.
- $101.9 million for regional airport upgrades.
- $80 million for the Lyell Highway project.
- $40 million for regional connectivity projects.
Investor Insight: Infrastructure investment enhances property values by improving accessibility and amenities, making regional areas more attractive for long-term growth.
Final Thoughts: Why Regional Real Estate is Here to Stay
Australia’s regional property market is shifting in a big way, reflecting the transformation in how Australians approach their living and working situations. Property values and rental prices are climbing, with regional areas generally outperforming their city counterparts. This growth is being driven by strong migration inflow and ongoing government investment in infrastructure.
With a 23.4% rise in regional migration to September 2024, it’s likely this trend will continue. For investors, regional areas are presenting a growing range of opportunities, but understanding each area’s unique dynamics is key to tapping into their full potential.
Key Takeaways:
- Net regional migration was up 23.4%, with both coastal and inland areas seeing growth.
- Regional property values are generally outperforming capital cities, with median house values up 5.8% annually and units up 6.1%.
- Regional WA and Regional QLD headed the charge (median values), with standout performers like Capel (+26%) and Townsville (+20%).
- Rental properties are in demand, with some regional LGAs experiencing up to 17% annual rent increases.
- Government-backed infrastructure projects are ensuring long-term sustainability and investment potential in regional markets.
