House prices in regional NSW have risen over the past year despite a recent quarterly decline, with some inland towns recording annual growth of more than 20 per cent, new figures show.
The median house price across regional NSW fell 1.2 per cent to $820,000 in the September quarter, but remained 2.6 per cent higher than a year earlier, according to the latest Domain House Price report.
Dungog, in the Hunter region, recorded the strongest increase among the areas highlighted, with its median house price climbing 26.9 per cent in 12 months to $907,500. Inverell rose 23.4 per cent to $475,000, while Broken Hill increased 22.7 per cent to $270,000.
Armidale, Liverpool Plains and Edward River also recorded annual growth of at least 20 per cent.
Regional NSW house prices defy wider downturn
David Cannington, Domain’s senior residential economist, said regional markets had not experienced the same sharp decline in sentiment as the capital cities. Sydney’s median house price fell 4.7 per cent during the quarter.
“The regional market’s probably driven more so by the underlying market fundamentals, so the supply and demand balance,” he said.
Employment opportunities, population growth and the relative affordability of regional homes compared with Sydney had helped attract buyers, Mr Cannington said. He added that these factors could make regional markets more resilient during a broader slowdown in property prices.
Investors seeking lower-priced homes had helped drive demand in some towns, although that activity has eased since changes to investor taxes in the federal budget and as mortgage and living costs have remained high.
Cameron Kusher, chief economist at Herron Todd White, said higher interest rates and weak housing sentiment had reduced buyers’ willingness to pay. Sellers were also having to temper their expectations, although many were still likely to have made substantial gains over recent years.
“A lot of investors were active in the market right up until the federal budget,” he said. “That rush of investor buying has pushed up prices.”
Mr Kusher said city residents had been drawn to towns offering employment in agriculture, mining, healthcare and education. However, growth had shifted away from some coastal markets that had previously attracted strong demand.
Byron recorded annual house price growth of just 2.7 per cent, taking its median to $1.51 million, while Kiama rose 1.7 per cent to $1.475 million. Mr Kusher said Byron had become unaffordable for many people who wanted to buy there.
Limited supply supports prices in Dungog and Inverell
Tavis Chivers, principal of Dungog estate agency Dillon & Sons, said the town’s price growth was being supported by a limited supply of homes.
“We just don’t have the oversupply. We only sell on average 30 residential houses a year, whether things are good or bad,” he said.
Several sales at the upper end of the market had also lifted Dungog’s median, Mr Chivers said, with buyers able to purchase substantial homes for about $1 million.
In Inverell, agent Annabelle Gleeson said buyer’s agents representing investors from Sydney and Melbourne had been buying properties priced up to about $550,000 during the past year. That demand had slowed noticeably over the previous eight weeks, she said, but people were continuing to move to the town.
Investors had been attracted by rental returns, while the town’s jobs, schools and new hospital were also helping to draw buyers from cities, Ms Gleeson said.
