Surf Coast Market Update: April 2022

Australia’s regional property markets continued to outperform the capital cities in the first three months of 2022, including here on the Surf Coast.

We look at what’s happening in the market and what we can expect next.

Regional Australia property market update

It’s been a strong 12 months for regional markets nationally, with median dwelling values (that’s houses and units combined) rising by 24.8%, compared to 15.7% in the capital cities, according to the latest PropTrack Home Price Index Report. CoreLogic reports that regional dwelling values rose by 5.1% in the March quarter alone, almost three times the 1.5% increase seen in the capital cities. In fact, the regional quarterly growth rate has stayed above the 5% mark since February 2021.

These heated conditions can be attributed to low-interest rates combined with a mismatch between the supply of homes for sale and buyer demand. The Australian Bureau of Statistics (ABS) reports that over the 2020-21 financial year, the number of people living in regional Australia rose by almost 71,000. At the same time, real estate sales inventory levels are very low. Over the four weeks ending March 27, CoreLogic reports that the total advertised housing stock for sale in regional Australia was 22% below the 2021 level and 43% below the previous five-year average. High buyer demand coupled with a low supply of properties for sale is putting upward pressure on prices.

Rents across Australia are also rising at above-average rates. Over the year ending March 2022, national rental growth was 8.7%. Meanwhile, a new report from the Australian Council of Social Service (ACOSS) and UNSW reveals that rents in Australia’s regional areas are now 18% higher than before the pandemic. Much like the sales trends, rising rents can be explained by high demand colliding with low supply. According to SQM Research, the national vacancy rate was a low 1.2% in February, while the Real Estate Institute of Victoria (REIV) reports that here in regional Victoria, it wasn’t much better at 1.3%.

What’s happening in the Surf Coast property market?

Of course, we are not immune to these market conditions here on the Surf Coast, and we’ve seen these trends playing out in our local sales and rental markets over the past years.

Our breathtaking beaches and bushland, commutable distance to Melbourne, sought-after schools, and recreation amenities like bike tracks and golf courses have seen our population grow by 4.4% in the year to June 2021, the most of any Victorian LGA. In a trend playing out in regional areas across the country, strong buyer demand saw house prices rise by an incredible 43% in 2021 to reach a median of $1.4 million.

The Surf Coast rental market has also experienced extraordinary demand from would-be tenants, leading to a 15.5% increase in rents between December 2020 and December 2021. And while these are remarkable results, we’re not alone. Regional Victorian areas like Corangamite, the Bass Coast, Horsham and Wangaratta experienced rental increases between 17% and 22% over the same period.

As a result, several Surf Coast areas ended up on CoreLogic’s ‘Best of the Best’ report for 2021, including Anglesea, Torquay, Jan Juc and Lorne – for sales and rentals.

What does it mean for Surf Coast locals?

Like any market conditions, the current state of the Surf Coast property market is a double-edged sword. It is welcome news for some, like homeowners, downsizers, and property investors. For others, like first home buyers, those looking to upgrade or upsize, and tenants, it may present challenges. But, like all markets, our real estate market is not static, and many experts predict that change is coming.

We may already be seeing the first signs. While national dwelling prices rose by 0.34% in March, this was the slowest monthly rate of growth in two years. And while regional markets continue to perform strongly and show the most resilience to a market-wide slowdown, pundits, like PropTrack economist Paul Ryan, are suggesting that the attraction to regional areas may wane as the year goes on. If 2022 is, as we all hope, the first year uninterrupted by lockdowns since the advent of the pandemic, buyer demand may well swing back in favour of city lifestyles and denser living. Having said that, for the time being, at least, demand from buyers and renters here on the Surf Coast remains robust.

Want more?

The Surf Coast property market has experienced extraordinary conditions in recent years, and navigating its twists and turns can be far from straightforward. No matter whether you’re thinking of selling, buying, investing or renting, everyone’s situation is unique and deserves a personalised approach. If you’re looking for guidance or advice, please always feel free to get in touch.