Regional housing markets are cementing their lead over the capitals, with Western Australia and tightening rental conditions driving a fresh wave of interest from buyers and investors.
Cotality’s February Regional Market Update shows regional dwelling values climbed 3.2% in the three months to January, outpacing the 2.1% gain across the combined capital cities. The shift comes as households confront stretched budgets, limited listings, and rising rents in the major centres.
With RBA lifting the cash rate to 3.85%, higher borrowing costs are nudging some buyers to look beyond the capitals for more affordable options.
Gerard Burg (pictured), Cotality’s head of research for Australia, said the data signals an entrenched split between city and regional trends.
“Affordability remains a powerful driver of buyer behaviour. With capital city prices still near record highs and stock levels tight, many households are once again looking to regional Australia for greater value and liveability,” Burg said.
Western Australia is the standout story of the quarter. Regional WA values surged 6.1%, up from 4.9% previously, putting it well ahead of other states. Albany (7.7%), Kalgoorlie‑Boulder (7.6%) and Busselton (7%) led the gains, with Bunbury and Geraldton also beating the state average. Nationally, Wagga Wagga in New South Wales delivered the strongest individual result, recording an 8.1% jump in values.
Queensland and South Australia posted firmer conditions compared with the previous quarter, driven by Toowoomba, Bundaberg and Cairns in the Sunshine State and Victor Harbor–Goolwa in SA.
In contrast, regional New South Wales (2.5%) and Victoria (2.3%) lagged the broader upswing and were the only states to see pockets of price falls, including Bowral–Mittagong, Warrnambool and Batemans Bay.
Selling conditions are particularly tight in high‑growth markets. Median time on market in regional WA and Queensland sits at 20 and 24 days respectively, with average vendor discounting at just 3.3%. Albany is currently the fastest‑moving market in the country, where homes change hands in a median of just 10 days.
Burg said the regional resurgence is underpinned by renewed migration flows and constrained supply.
“We’re seeing momentum build across a wide range of regional markets, from inland hubs to coastal centres and mining adjacent regions,” the Cotality expert said, adding that this reflects people and capital moving “into areas where buyers’ budgets stretch further and competition for available homes is strong.”
This echoes recent migration data which shows capital-to-regional moves still outpacing flows back to cities, as buyers now prioritise value and growth potential over pure lifestyle.
For the full Cotality report, follow this link.
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