The 2009 property market was characterised by strong growth in values within capital city markets accompanied by weakness in coastal and lifestyle areas but the performance of Australia's rural markets has largely gone under the radar. These regions are mainly supported by agriculture and mining. Many also act as service centres for the surrounding regions.
In this week's Property Pulse we take a look at some of the larger rural areas of the country and how median prices and rental rates have performed in recent times.
Whilst median house prices throughout our capital cities sit at $485,000 and median unit prices are recorded at $400,000, property in rural Australia is much more affordable.
The rural area with the greatest number of house sales during the year was Toowoomba which is about 120 kilometres from Brisbane, it recorded 3,391 house sales at a median price of $289,000.
Across those housing markets detailed, change in median house prices during the last 12 months has varied greatly. Regional areas of Northern Territory such as: Alice Springs (26.7%) and Tennant Creek (34.1%) have seen large increases in median prices following the trend of strong value growth recorded within Darwin. At the same time, regional areas of Western Australia have recorded falls in median prices of -21.0% in Coolgardie and -1.8% within Kalgoorlie/Boulder.
Of the 23 markets analysed, 14 of them have recorded an increase in median house prices during 2009. Tennant Creek (34.1%), Alice Springs (26.7%) and Longreach (15.8%) recorded the largest median price increases whilst Coolgardie (-21.0%), Mount Isa (-3.0%) and Greater Shepparton (-2.5%) witnessed the largest falls.
When looking at house rentals, capital city markets have been characterised by easing rental rates during the last six to nine months. Whilst capital city rents have eased, most of the rural areas detailed have seen rental rates increase. The largest rental increases were recorded in: Wagga Wagga (11.1%), Dubbo (8.7%) and Toowoomba (8.3%). The greatest falls in rental rates occurred in Coolgardie (-26.5%), Charters Towers (-11.2%) and Kalgoorlie/Boulder (-8.3%).
Within these rural areas of the country units are generally in much shorter supply than houses and as a result many of those regions analysed across the housing market don't have enough unit sales to record statistically reliable results.
The largest supply of units within these rural areas are again found in Toowoomba, during the last 12 months there were 588 unit sales in the region.
The price of units in these regional markets has generally recorded positive growth during the last 12 months, mirroring the results in capital city markets which saw units record a stronger level of value growth than houses.
The best performers amongst these regions were: Alice Springs (26.7%), Armidale Dumaresq (15.3%) and Latrobe (13.3%). Whyalla (-4.2%), Mount Isa (-3.7%) and Wagga Wagga (-3.5%) recorded the greatest falls in median unit prices during the last year. Of the 17 markets analysed only three of them have recorded a fall in median unit prices during the last 12 months.
Of those regions which recorded enough rental advertisements to calculate statistically reliable results only units in Kalgoorlie/Boulder saw rental rates ease during the 12 months (-6.1%) whilst the largest rental increases were recorded in: Wagga Wagga (15.0%), Alice Springs (13.2%) and Toowoomba (12.5%).
Looking a little deeper into the results, Darwin was the best performing capital city during 2009 with property value growth of 16.6% and this performance was replicated in the regional areas of the state with Alice Springs and Tennant Creek recording strong growth in median prices also.
Melbourne was the second best performer during 2009 with value growth of 15.6%. Although Melbourne performed strongly, this strong level of growth was not replicated in the rural areas of the state with median house prices in Ballarat, Greater Bendigo and Latrobe seeing only slight growth whilst Greater Shepparton prices fell. Rural unit markets faired a little better with all four regions recording growth in median prices with quite strong growth occurring in Latrobe and Greater Shepparton.
The results show that despite the fact that generally property market analysis focuses on capital city markets, these results don't always reflect what is occurring in markets outside the capital city. Dig a little deeper and we can see there are some significantly different market dynamics at work.
Tim Lawless is the Director of Property Research at RP Data.
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