Demand and limited supply for affordable lifestyle neighborhoods continue to push up local housing prices.
of PropTrack Australia Regional Report 2022an annual report analyzing regional real estate markets across the country was released this week.
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Demand for rural real estate surged during the pandemic. Source: Getty Images.
The report explores slowing conditions in Australia’s regional property markets following a pandemic-induced “regional renaissance” that saw regional home prices rise at the fastest annual pace in 35 years. increase.
Click here to read the full report
Things are changing rapidly this year, with rising interest rates rebalancing the housing market from last year’s extreme growth.
In October 2021, when sellers dominated, only 29% of sales across Australia were priced below original list price.
However, as interest rates rose sharply and selling conditions softened, its share rose 20 percentage points to 49% in October 2022, the highest since October 2020.
TOP 10 REGIONS SA4 WITH THE MOST INCREASED DISCOUNTS
Share of properties sold below list price in October 2022
| SA4 | state | Percentage of sales below list on Oct 21 | Percentage of sales below list on Oct 22 | YoY (ppt) |
| Southern Highlands and Shoalhaven | New South Wales | 21.57 | 72.65 | 51.08 |
| sunshine coast | queensland | 17.11 | 62.93 | 45.82 |
| Illawarra | New South Wales | 19.91 | 61.46 | 41.55 |
| mid north coast | New South Wales | 23.94 | 63.14 | 39.2 |
| Coffs Harbor – Grafton | New South Wales | 34.62 | 70 | 35.38 |
| Ballarat | Big | 17.07 | 51.72 | 34.65 |
| Geelong | Big | 10.1 | 44.15 | 34.05 |
| Capital Area | New South Wales | 29.53 | 62.63 | 33.1 |
| gold coast | queensland | 26.88 | 59.71 | 32.83 |
| Latrobe – Gippsland | Big | 39.34 | 72 | 32.66 |
The shift reflects a shift in conditions over the past year, with vendors slowly resetting their price expectations after months of price declines, while nationally the price increases seen in 2018/19 remains below the level.
TOP 10 REGIONS SA4 WITH HIGHEST SHARE OF SALES BELOW LIST PRICE
Share of properties sold below list price in October 2022
| SA4 | state | Percentage of sales below list on Oct 21 | Percentage of sales below list on Oct 22 | YoY (ppt) |
| Western Australia – Outback (South) | Wa | 82.35 | 80.89 | -1.46 |
| Northern Territory – Outback | NT | 69.49 | 76.6 | 7.11 |
| Southern Highlands and Shoalhaven | New South Wales | 21.57 | 72.65 | 51.08 |
| Queensland – Outback | queensland | 82.05 | 72.41 | -9.64 |
| McKay – Isaac – Whitsundays | queensland | 69.76 | 72.11 | 2.35 |
| Warrnambool and Southwest | Big | 40.91 | 72.07 | 31.16 |
| Latrobe – Gippsland | Big | 39.34 | 72 | 32.66 |
| Western Australia – Outback (North) | Wa | 53.62 | 71.43 | 17.81 |
| Coffs Harbor – Grafton | New South Wales | 34.62 | 70 | 35.38 |
| Darling Downs – Maranoa | queensland | 71.19 | 68.7 | -2.49 |
For buyers, increased vendors’ willingness to discount may make it easier to enter the market.
The percentage of sales below list price increased most in Southern Highlands and Shoalhaven, where 73% of sales in October 2022 were sold at:
This is up 51% from a 22% share in October 2021. Sunshine Coast saw his 63% of its October sales below list price, up 46% in the last 12 months.
Vendors are most likely to offer discounts in the WA and Northern Territory outback regions, followed by the Southern Highlands and Shoalhaven.
63% of Sunshine Coast sales were below list price in October. Source: Getty Images.
Again, unsurprisingly, the fastest-discounting regions are the higher-value lifestyle regions, where home prices skyrocketed during the pandemic and are currently declining the fastest.
Vendors will have to reset their price expectations in these regions as home price growth reversed in recent months as buyer demand fell.
Where are buyers still paying the premium?
Rural SA, South East Queensland and Rural NSW’s relatively affordable SA4 continues to see price increases of nearly 20% in some areas over the past year.
Buyers in southeast Tasmania (67%) and Toowoomba, Queensland (60%) were most likely to pay a higher premium than listed, with 3% of the property in the 12 months to October 2022. of which nearly 2 have sold above their list price.
In south-east Tasmania, nearly two-thirds of properties have sold above list price in the last 12 months. Source: Getty Images.
Areas where home prices are rising to new price peaks are also areas where a higher share of sales is exceeding list prices. This makes sense, as options are limited and buyer demand remains strong, vendors are adjusting to market trends in these areas.
Top 10 Regions with Highest Share of Sales Above List Price SA4
Percentage of homes sold above list price in October 2022
| SA4 | state | Sales share (%) for the above list on October 21 | Sales share (%) for the above list on October 22nd | YoY (ppt) |
| southeast | TAS | 87.3 | 67.44 | -19.86 |
| Toowoomba | queensland | 60 | 60 | 0 |
| Launceston and the Northeast | TAS | 80.08 | 51.72 | -28.36 |
| west and northwest | TAS | 65.65 | 40 | -25.65 |
| Bunbury | Wa | 42.16 | 39.39 | -2.77 |
| wide bay | queensland | 42.86 | 36 | -6.86 |
| cairns | queensland | 36.67 | 35.71 | -0.96 |
| Barossa – York – Mid North | SA | 18.18 | 34.62 | 16.44 |
| Townsville | queensland | 28.47 | 31.15 | 2.68 |
| Western Australia – Wheat Belt | Wa | 28.85 | 30.54 | 1.69 |