Housing markets in regional areas across Australia are defying the COVID crisis, the latest analysis shows.

Releasing its quarterly review of Australia’s 25 largest non-capital city markets, real-estate information services provider CoreLogic says dwelling prices across regional areas have remained stable since the start of the pandemic even as those in capital cities have fallen.

All up, dwelling prices in regional markets contracted by only 0.1 percent in the five months from March 1 until July 31.

By contrast, capital city prices have fallen by 2.0 percent over that time.

Moreover, regional housing markets are performing well overall.

Of the 50 separate detached house and unit markets across the 25 regions included in the report, values have risen across 37 markets in the past twelve months.

All up, 20 of the 25 detached home markets recorded annual increases in value as did 17 of the 25 unit markets.

Leading the way are larger regional centres such as Illawarra and Ballarat which are close to Sydney and Melbourne and sufficiently large to offer amenity whilst still offering regional lifestyle.

Over the past twelve months, detached home values in Illawarra have risen by 12.6 percent whilst median unit prices have risen by 7.6 percent.

Meanwhile, Ballarat has both the shortest selling times (30 days) and the lowest vendor discounts (-2.1 percent) of any detached house market.

In the unit market, meanwhile, Launceston and North-East Tasmania is performing well with medium unit prices up 14.8 percent year on year and median unit selling periods of 26 days.

Sturt Street, Ballarat

CoreLogic Head of Research Tim Lawless said the relatively strong performance of regional markets can be attributed to several factors.

With around 85 percent of Australia’s net overseas migration going into capital cities, regional markets are less dependent upon migration flows and have not been as badly impacted from the stalling in migration since COVID.

Also there likely remains some momentum in the trend towards rising demand for lifestyle properties that was prevalent prior to COVID-19.

Lawless says regional areas offer advantages and disadvantages.

“On the positive side, housing prices tend to be lower, providing a more affordable entry point to the market, population densities are generally lower which is something that might be even more appealing as we move through this pandemic, and in many examples, regional areas will offer some lifestyle advantages, either via the locations proximity to the coastline or wide open spaces,” he said.

“On the downside, regional economic conditions can be more volatile, especially those areas that are heavily dependent on a single industry for economic prosperity, and some areas may not show the same level of amenity and access to essential services as a capital city or major centre.”

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