Population stall hits regional house prices

by Adam Smith28 Oct 2011

Stalling population growth has halted house price rises in large regional centres, but two are bucking the trend.

RP Data's new Property Pulse has indicated that weak housing market conditions have been accompanied by slow population growth in Australia's 10 largest regional centres. However, analyst Cameron Kusher has said Newcastle and Wollongong have gone against trend.

"Wollongong and Newcastle have been the exceptions due largely to housing affordability constraints where we have found that Sydney-siders are moving to more affordable areas, but still within commuting distance of the city," he said.

The Gold Coast, Sunshine Coast and Cairns have seen an "extremely pronounced" slowdown after traditionally being the fastest growing council areas, RP Data said. Kusher said this was reflective of a weaker tourism and retail market, as well as a slowdown in the "sea and tree change" migration to the areas.

The slowdown in population growth has brought with it a decline in median prices for the regions, with all 10 of the largest regional centres recording declines over the past 12 months. Townsville has seen the most pronounced decline, with median house prices falling 14.3% over the last 12 months. Though Wollongong and Newcastle have seen stronger population growth, median house prices in the cities still fell 1% and 1.6%, respectively.

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