The city or the country? No beating around the bush for price growth since COVID

As the five-year anniversary of the beginning of the COVID global pandemic looms, regional house price growth is still outpacing that of capital cities.

On both a national and state level, regional house price growth has overtaken capital city growth since the onset of COVID, according to research by CoreLogic.

Since the onset of COVID growth for the combined regional market, covering all regional areas across the country, there has been a 54.9 per cent rise in house prices.

It sits at a peak median house price of $657,652.

Meanwhile, house prices in the combined capitals grew by 33.6 per cent during the same period, albeit coming in at a higher median of $896,372.

CoreLogic Head of Research, Eliza Owen, said several factors saw this growth acceleration since COVID.

“Looking at the returns since that COVID period, the uplift has really reflected structural changes in housing demand that came with the pandemic period,” Ms Owen said.

“There was a significant normalisation in remote work; early retirement decisions were probably triggered because of the kind of initial shake-up in the labour market.

“And there was also an initial boost to incomes through the pandemic, which saw people just demanding more housing, more space as people were spending more time at home, so they wanted more housing, essentially.”

Where prices have skyrocketed

In the Southern Tablelands of NSW, the towns of Young and Yass sit within an area that has seen a whopping 76.8 per cent growth since the onset of COVID.

That makes it the regional area with the highest growth in NSW.

During that time, the median house price rose from $328,946 in March 2020, and today, it sits at $581,500.

Sitting adjacent to the ACT, with some areas a commutable distance to the capital, may have helped raise prices, according to Ms Owen.

“Canberra has the third highest median house price of capital cities, so for people who had leniency around working in the office and can work from home, they may have wanted to see something more affordable,” she said.

“It also has traditionally been a nice tree change area and is a place where you can get more bang for your buck.”

She said prices had remained buoyant in the area.

“I think there are lifestyle factors that continue to attract people to the areas, but it is relatively affordable as well.”

On the rise in Victoria

While parts of regional Victoria have seen recent drops after initial gains at the onset of COVID, the Wodonga Alpine region has gone from strength to strength.

Since the COVID onset prices have risen by 55.6 per cent and today sit at a median price of $647,725.

That is up from $416,281 in March 2020.

“That uplift has well surpassed the greater regional Victoria area rise of just under 31 per cent,” said Ms Owen.

It also was way ahead of growth in Melbourne during the same period, which has experienced only an 8.4 per cent home value rise since the onset of COVID.

Tassie hot spot

Overall, regional Tasmania has outpaced the state capital of Hobart since March 2020.

It has seen a price growth of 48.1 per cent, well above Hobart’s rise of 26.7 per cent in the median house price.

The state’s south-east coast saw the biggest rise, with a 55.6 per cent rise in that period, bringing the median house price to $647,725.

It includes areas such as the Freycinet Peninsula and the coastal hot spots of Coles Bay, Bicheno and Dolphin Sands.

“It’s probably one of the best bang for your buck areas in terms of the secluded coastal lifestyle that is popular, not only with retirees and people who are looking to make that lifestyle change but holidaymakers as well,” Ms Owen said.

Strong tourism and holiday appeal also made homes in the area an attractive investment for investors.

“This area has outperformed with its coastal appeal and a relatively good price point of $650,000 for the median dwelling value.”