Australia's fastest-growing regions so far in 2023

The Australian property market has experienced a momentous change in the past two years. 

After a tremendous property boom that made daily headlines, many expected it to slow down off the back of increasing interest rates.

While we saw the market take a downturn, it lasted only a short while. The latest Domain House Price Report found prices are rising again, and the largest price jumps came from the most unexpected regions.

Regions with more than a 10 per cent quarterly change were located mainly outside the capital cities. This includes regional NSW’s Coffs Harbour, Murray and Mid North Coast, the South Australian outback and the Launceston area in Tasmania. 

The current driver of growth across Australia so far has been units, which paints a bigger picture of the market as a whole.

These regional unit quarterly changes may indicate not only a change in the local market, but a shift in affordability and borrowing capacity, says Domain’s chief of research and economics, Dr Nicola Powell.

“The fact that affordability is changing so much in these regional markets means that buyers are steering to affordable alternatives – such as a unit – to gain access to the market,” Powell says.

“I think there could be two really strong reasons why we are seeing the unit sector in these markets make such great gains.”

“Number one is lower borrowing capacity and number two is the affordability of being able to purchase a house, and the change in house prices these areas have witnessed over the pandemic.”

Coffs Harbour’s median unit price in December 2022 was $490,000, but in March 2023 it jumped to $569,500.

Local Coffs agent Dave Tompkins of Super Property North Coast attributes the sudden price growth to the range of new projects and development creating new jobs in the region. 

“We are getting a new bypass, which is bringing a lot of people, jobs and buyers,” he says.

“Plus, a big unit development is happening in Park Beach, called Shoreline. It’s between the beach and the shopping plaza. They are building this over-55s place, which is like a resort [and] has been really popular.”

He says new people coming into the region have enough money to “spend big bucks” and shift the median price.

Similarly, the median unit price in Launceston has also grown this year, now reaching $420,000, compared to $365,000 in December 2022. 

Launceston real estate agent Jeremy Wilkinson of Harcourts Launceston says the growth of unit prices is related to the large number of people being priced out of standalone houses, and choosing more affordable options instead.

“We’re seeing a lot of people on the back of COVID are doing one of two things. One, looking to downsize into something more manageable and affordable, putting some pressure on the unit market. And first-home buyers are focusing on buying units because stand-alone houses are just too expensive,” he says.

“There is a lot of competition [in unit sales] because it’s the bottom of the price market.”

Powell expects to see more unit growth in those regional locations in the upcoming financial year as people’s purchasing power decreases due to affordability, but more pressure will be placed on capital cities where supply can’t meet demand. 

Time will tell if these regions will continue to be the top performers across the country.