It’s a question agents, buyers, and sellers alike are beginning to ponder as they emerge from what has inarguably been the absolute wildest of times.
The most recent figures show that unlike Virgin Australia, the regional market still refuses to cool its jets—with demand growing to the extent that local tenants are being priced out of some regional NSW communities like Tweed Heads and Wingecarribee in the Southern Highlands, where rents have risen by more than 20% year on year.
Seachange, treechange, or just needchange, city dwellers have flocked to the regions in unprecedented (should we bid that word adieu, too?) numbers, where demand for both rentals and houses far exceeds the supply due to the rise of short-term letting and landlords moving into their investment properties or holiday homes on a full-time basis.
The latest Domain report shows that house rents in two thirds of regional NSW council areas jumped at least 10% over the year to March, overtaking the 9.1% growth seen in Sydney. In fact, Sydney’s median weekly asking rent of $600 is now only $100 higher than that of the rest of NSW.
Incredibly, median weekly rents in Byron have shot to $950, with Tweed and Wingecarribee in the Southern Highlands also surpassing Sydney with $700 rents. Still, despite its current status as the most expensive region, Byron saw a lower 6.7% increase over the year, with affordability constraints now slowing price hikes.
The same report shows an annual rental rise of a whopping 22.7% in Bellingen Shire on the Mid North Coast to a median of $540, the upper hunter up 20% to a median of $390, and Orange up 17.6% to $500. Regional house prices have accelerated over the past three months too, up 6.3%, with the old country music capital of Tamworth in the north-east of NSW rising 9.3% over the past year to a median of $410,000. Demand is so high there that the vacancy rate sits at around 1%.
The rise in rentals is reflected also in property prices, with Corelogic data showing that prices in regional NSW grew 5.1% in the March quarter, a staggering 17 times quicker than in Sydney.
But is there an end in sight? The last quarter growth rate, while relatively sizeable, is still a fair bit below the 7.8% growth we saw in regional NSW in the May quarter of 2021. According to CoreLogic, growth at this rate is unsustainable, and we have higher interest rates and tighter lending to either thank, or curse, for that.
Also, this time last year, it took just seven days to sell a home, while today the average is 30. An early sign of what’s to come, perhaps?
And although they’ll do everything in their power to distance themselves from any comparisons to Sydney, regional areas are not immune to the same factors capital city markets are up against. In fact, the regional market could well be facing a bigger threat than interests rates and tightened lending combined: the return to normality.
