In April, prices across the country increased at their slowest monthly pace since May 2020.
Price growth in regional markets has been stronger than in capital cities for some time.
The continued increase in investor activity, as well as immigration, is likely to benefit the major cities over the rest of the year.
While Australia’s property market started strongly in 2022, concern about an increasing cash rate, rising inflation, overseas geopolitical issues and an ongoing federal election campaign saw property price growth stall across our capital cities over the last few months.
In April, prices across the country increased at their slowest monthly pace since May 2020, the period just after national lockdowns was lifted and prices fell, according to the latest PropTrack Home Price Indicator report.
Here’s what happened over the last month
Across the capital cities, prices were unchanged in the month – with just 0.02% growth in April.
But there are some areas that are bucking the downward shift.
Regional areas, Brisbane and Adelaide outpace capital cities
Regional property price growth continues to outpace capital cities, with trends towards lifestyle locations and larger homes benefiting regional New South Wales, Queensland, and Tasmania in particular.
Prices have increased 23% in the past year in regional areas, but only 14% in the capitals.
The report shows that the strength in regional areas has been particularly evident in regional NSW, Queensland, and Tasmania, where growth has exceeded 23% over the past year.
And these trends also continue to boost prices in Brisbane and Adelaide, with both cities continuing to see solid price growth in 2022.
Brisbane dominates the list of high-growth regions
The Proptrack report shows that parts of Brisbane feature strongly in the highest growth regions over the past year.
And regional parts of NSW have also seen exceptional growth over the past year.
“Looking across the capitals, the outperformance of peripheral parts of cities is clear.
With larger homes, and reduced commuting, these regions have increased in prominence over the post-pandemic period,” the report’s author, REA economist Paul Ryan, said.
“It will be interesting to see if this balance swings back to inner cities as workers return to offices and immigration returns in 2022 and 2023.”
What next for property price growth?
Price growth in regional markets has been stronger than in capital cities for some time, and we expect that to continue, at least throughout 2022, Ryan explained.
“The lure of regional Australia remains strong, with property prices still in most instances significantly lower than the cities, despite recent price increases.”
The other markets likely to continue their strength are Brisbane and Adelaide, which have the appeal of city living with larger homes and lower prices.
Meanwhile, Ryan adds that the continued increase in investor activity, as well as immigration, is likely to benefit the major cities over the rest of the year.
Preference shifts since the pandemic have also made both inner-city locations and apartments relatively cheap, which comprise the types of homes investors and recent immigrants often prefer, he explained.
Overall, price growth looks to be weak for some time.
“We are likely to see a period where strong labour markets and wages growth are matched by higher borrowing costs. This is unlikely to see strong price growth,” Ryan said.
But it’s not impossible – in the past, strong economic conditions paired with interest rate increases have brought moderate price growth.