Buy in the bush: the regional towns having a surge in buyer demand

Certain regional areas are experiencing a surge in homebuyer demand, according to new data from one of the banking big four.

Westpac's latest lending data reveals the top 30 areas for homeowners with the biggest increase in buying activity over the year to May were outside the capital cities.

In fact, nearly half of the booming areas are regional towns.

The trend underscores a move away from urban centres and highlights an enduring appetite for regional living that has far outpaced post-pandemic expectation - and is reflected in recent national price growth figures.

"Regional Australia continues to outperform, with prices rising 5.9 per cent over the past year compared to three per cent across capital cities," said Westpac economist Matthew Hassan.

"More strikingly, since 2019, regional property values have surged 65 per cent - outpacing capitals by nearly 25 per cent - highlighting a trend that has proven more enduring than initially expected."

Buyers, squeezed by years of never-ending cost-of-living pressures, are taking boosted borrowing power thanks to recent interest rate cuts and shifting their focus to regional pockets that offer more sustainable, longer-term affordability and lifestyle appeal.

Stability from infrastructure projects and investment is another driver to particular regional centres.

Where are buyers snapping up their next home?

"We're seeing a diverse mix of growth across the country," said Managing Director of Mortgages at Westpac James Hutton.

"In Queensland, demand is surging in regional areas like Bundaberg and Townsville, fuelled by recent infrastructure upgrades such as the Bundaberg Port expansion and North Queensland Stadium."

Closer to Brisbane, a demand belt about 50 kilometres from the CBD arcs from the north to the southwest - anchored by Caboolture, Ipswich and Jimboomba.

In Victoria, Wangaratta and Benalla are emerging as appealing alternatives to Melbourne's inner suburbs, offering a quieter pace of life without compromising access to essential services.

Lake Macquarie and Port Stephens, along with the Tweed, showed the biggest growth in New South Wales.

In Western Australia, "growth is split between high-value suburbs like Leederville and emerging regional areas such the mid-west, the latter buoyed by the performance of Australia's iron ore and gold industries," said Mr Hutton.

"It's a clear sign that Australians are exploring a broad range of options when it comes to home ownership."

With recent interest rate cuts providing some wiggle room, Mr Hutton said that buyers are seeking lifestyle upgrades.

"Australians recognise the value and lifestyle benefits of regional living," said Mr Hutton.

"Whether it's the coast, the hinterland, or vibrant regional centres, these areas are experiencing strong growth as buyers seek space, affordability, and a sense of community. These aren't just homes - they are lifestyle decisions."

How to choose a great regional buy

Christian Stevens, CEO and mortgage broker at Farmer's Finance, said that regional hubs have "benefited from lifestyle appeal and migration shifts since COVID."

He said their major positives are an easier entry point to ownership, lifestyle appeal and a sense of community.

However, in order to avoid the volatility of some regional areas, he advised avoiding towns that "rely heavily on a single industry or local infrastructure, which makes them more exposed to downturns."

For any homeowner or investor looking to buy, Mr Stevens highlights several key factors that make for a great purchase.

"Whether you're looking in a capital city or a regional hub, the fundamentals of a good buy don't change," he said.

"Buyers should be focusing on areas with strong employment drivers and good transport connections, because those things underpin long-term demand.

"Beyond that, you want locations that people genuinely want to live in: close to schools, healthcare, retail and lifestyle amenities. And the property itself should be one that appeals to owner-occupiers as well as investors - good light, functional layouts, parking, and minimal upkeep."