These are the regional areas to watch
It's the positive sign property purchasers have been looking for, after a prolonged period of uncertainty in the market.
Regional areas are often pulled along in the slipstream of improving capital city prices. But as the outlook for the market continues to improve, non metropolitan areas in Australia are moving up, under their own steam
In regional real estate movements clocked by property data specialists CoreLogic, one corner of Queensland has proven to be the country's top performer, despite a year of falling activity across all areas, turning the market on its head.
The Wide Bay region north of Brisbane saw the largest annual increase in dwelling values for both houses and units according to the latest Quarterly Regional Market Update. The region was the only place where overall values didn't decline. Houses were up 2 per cent and units increased by 4.9 per cent.
But overwhelmingly, of the 11 regions examined in the CoreLogic report, sales activity was down and values had fallen. While the numbers don't look too impressive on paper (especially for local homeowners or investors who bought in these regions in recent years) senior research analyst Cameron Kusher said there is light at the end of the tunnel.
"What this report shows is that the rate of growth, and transactions, in those regional markets are slow. The data in the report is until June. But we have had, on a national level, a bit of an improvement in market sentiment over the last few months and the capital cities are seeing growth coming into the market," he explained.
"While that's not necessarily showing yet in the regional markets, over the next six to 12 months we will start to see a recovery in some of those regions; following on from what is happening in the capital cities."
Generally, regional markets do take their lead from the capitals, Mr Kusher said.
"It's not completely dictated by the capital cities, but if you look at where the target regional markets are, most of them are surrounding the capitals and they do have a bit of a link," he said, adding that the Illawarra region, the Newcastle and Lake Macquarie area as well as Geelong are prime examples of this market movement.
Although, there are some regions that tend to walk to the beat of their own drum, he said.
"If you look at regional Western Australia and Northern Territory, they've certainly not been anywhere as weak over the last couple of years as their capital cities have been."
Ultimately, Mr Kusher said the declines shown in these regions (with the improvement in capital city markets already in evidence) could be the sign investors are looking for.
"It's potentially a good time. We're not probably expecting very strong growth, but generally regional markets do have better rental yields than you get in the capital cities. And as interest rates come down, you could find that purely based on the rental return there are opportunities. In our next report, expect to see recovery in some of those regional markets," Mr Kusher said.
These are the regions enjoying the greatest growth:
Wide Bay, Queensland
Wide Bay, an almost 50,000sq m region of the Sunshine State along the coast, is home to holiday hot spots such as Fraser Island and Hervey Bay as well as the sugar capital of Bundaberg and the inland gold rush town of Gympie.
After a decade of dormancy, the area recorded the biggest rise in home values for both houses and units in the 12 months to June. House values rose 2 per cent and unit values increased 4.9 per cent in the year to May.
One of the driving factors behind the region's strength in values is the fact that local population growth has exceeded the state average over the past two decades, with forecasts predicting the region will be grow to more than 430,000 people by 2031.
Mr Kusher said the combination of higher commodity prices, a pick-up in mining investment and increased interstate migration was likely driving the local recovery.
"Migration from NSW to Queensland is picking up, so perhaps people are looking at that area again," Mr Kusher said.
Newcastle and Lake Macquarie, NSW
The tide may have turned for the Newcastle area.
While the report showed a continued weakening of the property market in the three months to June, Mr Kusher said he had started to see an improvement in recent months.
"I think the next quarter will show an increase in property values for Newcastle that we have so far been seeing until August," he said.
Sales activity was lower year-on-year across all regions of NSW with Newcastle and Lake Macquarie down 19 per cent when compared to May 2018.
The region saw home values fall over the 12 months to June 2019; houses were down 8.8 per cent and unit values fell by 9.5 per cent.
Wollongong's surrounds have shown signs of recovery after a rocky June quarter.
The report demonstrated a continued weakening of the property market in the three months to June, but Mr Kusher said there had been a slight shift in the months since.
"In the months to August, Illawarra has seen its falls slow and we might even see signs of increases in the next quarter," he said.
View of nearby beach from home at 17 Killaroo Avenue in Stanwell Park near Wollongong.
The Illawarra region is showing signs of a property recovery.
In the report, Illawarra was shown to have had the biggest fall in sales volumes across regional NSW with a 20 per cent drop when compared to May 2018.
Illawarra was also home to the largest annual decline in house values with a 11.9 per cent drop when compared to the same period last year.
He said a surge in residential development in Wollongong could see apartment values take a hit.
According to Mr Kusher, the region had been given a kickstart from the Melbourne market.
Geelong's house values fell 4.7 per cent over 12 months to June, however more recent data shows prices are bouncing back.
Mr Kusher said the recovery in Melbourne, where prices jumped 2 per cent in three months, had been flowing through to Geelong's property market over the past three months.
"It's been a pretty sharp downtown in the past year in houses and units to June, but we have got more up-to-date data and in the past couple of months we have seen a slight increase in the Geelong market," Mr Kusher said.
"And what we have seen is the recovery has started in Melbourne and is stretching out to nearby areas like Geelong."
"It is still pretty subtle increases but it's something to keep an eye on for sure."
Sunshine Coast and Gold Coast, Queensland
The largest annual fall for Queensland's house values was seen on the Sunshine Coast, where house prices were down 2.9 per cent, while unit values actually increased by 1 per cent over the same period.
Dwelling sales activity on the Sunshine Coast decreased by 17 per cent for the year, while on the Gold Coast activity fell by 18 per cent.
For the Gold Coast region, the CoreLogic report showed that home values were down slightly year on year; houses had dropped by 2.8 per cent while units had decreased by 2.2 per cent.
Townsville and Cairns, Queensland
The Regional Market Update also showed a sharp improvement in the rate of decline in home values in Townsville. House values in the area were down only 0.3 per cent over the year while units had decreased more significantly by 5.5 per cent during the same period.
"Adani announcing it's going ahead has been a big thing for that market. Perhaps leading to some confidence returning," Mr Kusher said.
House values also rose 1.7 per cent in Cairns over the year while units were down 4.4 per cent.
"It's really being driven by the fact that market's gone nowhere for a long time," he said.
"Mining is a big source of employment in these regions, so that's probably having a bit of a positive impact," he added.
Bunbury, Western Australia
Western Australia's Bunbury region saw sales volumes fall by 7 per cent over the 12 months to May. Home values were also down across the region with house prices down 3.6 per cent and unit values (though they only accounted for less than 8 per cent of the market) were down 16.5 per cent over the year to June.