Australia's regional housing markets continues to grow as many Australians looking to buy a home away from the city.
According to the latest report from REA Insights, homes in regional areas outperformed those in capital cities in terms of price gains over the past year. In fact, regional markets recorded a price growth of 9.6% — double the rate the capital cities recorded at 4.8%.
However, it appears capital cities are starting to recover. Dwelling prices in capital cities increased by 0.4% in February, slightly higher than the 0.3% gain in regional markets.
Cameron Kusher, director of economic research at REA Group, said capital city markets are leading the charge so far this year.
"It will be interesting to see if this trend continues as vaccines roll out in Australia and we head towards a new COVID-normal," he said.
Still, Kusher believes the lure of regional Australia with its lower property prices and desirable lifestyle remains strong.
"But we may see those who intended to make a tree-or-sea-change reconsider their regional move as cities reopen," he said.
A separate report from CoreLogic showed a similar observation about the capital cities starting to recover.
While regional markets continue to show a higher rate of capital gain relative to the capital cities in the CoreLogic report, the gap has already narrowed.
"Regional areas generally recorded less of a decline in housing values through the worst of the COVID period last year, while also showing an earlier and stronger growth trend through the second half of last year," the CoreLogic report said.
Kusher said the outlook is strong for Australia's overall housing markets as buyer demand remains surging.
“Rising consumer confidence in Australia on the back of open interstate borders and the rollout of a COVID-19 vaccine has buoyed the market," he said.
Kusher furthered: “Property prices have clearly responded positively to state and federal government housing stimulus along with the lowest borrowing costs on record. The main potential bump in the road to recovery will be what happens as government and banking support is wound down over the coming months."