Regional Australia is extending its lead over the capital cities on home price growth, creating both opportunities and challenges for mortgage brokers as more clients look beyond Sydney and Melbourne for affordability and lifestyle.
PropTrack’s December Home Price Index shows national home prices are at a fresh peak, “up close to 50% since December 2020.” Over the past year, “home prices in capital cities grew 8.5%… while regional areas recorded stronger growth at 9.8%.” Since August 2024, “annual growth rates in regional areas have consistently outpaced that of capital cities” and, with the gap widening in the past month, “it is likely that this trend may continue,” PropTrack economic analyst Megan Lieu wrote.
Demand is a key driver. Across the 2025 calendar year, “demand for combined regional areas rose by 20% for houses and 14% for units compared to the 2024 calendar year,” measured by key enquiries per listing. By contrast, “demand growth across combined capital cities was more modest, at 10% for houses and 9% for units,” highlighting the effect of “persistent affordability pressures in our capitals,” Lieu said.
Regional markets dominated enquiry growth, accounting for “seven of the top 10 Greater Capital City Statistical Areas (GCCSAs), recording the largest growth in enquiries for houses, and six of the top 10 for units.” Not only were more buyers enquiring overall, “buyer engagement was more concentrated in regional markets.”
Migration trends are reinforcing the shift. The movement from capital cities to regions “has been ongoing for the past 25 years and has been more pronounced in recent years” as hybrid and remote work expand and city homes become less affordable.
Sydney and Melbourne have recorded net population losses since the September 2024 quarter, with many movers heading to regional counterparts or large hubs such as regional Queensland.
Among those arriving in regional areas, the largest share are aged 45–64 and “over 70% were homeowners,” boosting purchasing power and supporting “stronger purchasing activity and, in turn, more pronounced price growth in the regions.”
From September to November 2025, new listings in regional areas fell 5.3%, 4.8% and 7.0% year-on-year, deeper declines than in the capitals. New dwelling approvals in regional areas in 2025 were 44,361 – “28% below approvals in the early 2000s and 14% below approvals in the mid-2010s.” With strong population growth and limited new stock, “the shortage of new housing has increased competition and placed upward pressure on prices.”
This regional outperformance also sits alongside a separate “two-speed” trend flagged by ANZ, with Sydney and Melbourne starting to cool while Perth, Brisbane and Adelaide remain strong. Together, the data suggest many borrowers are being pushed both into more affordable regional markets and into relatively better-performing smaller capitals as rates rise.
PropTrack expects “we will continue seeing stronger price growth in regions than in cities” in the near term, with supply improvements “unlikely in the near term” and housing affordability in the capitals still at “historically challenging levels.”
For mortgage brokers, that means more clients chasing regional value, tighter stock, and hotter competition – making fast, clean pre-approvals and deep local market knowledge increasingly critical.
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