‘Exploded’: The regional markets punching above their weight

3 weeks ago 7

Aerial view of the stunning Gold Coast skyline on a sunny day, Queensland, Australia

Regional Australia’s property boom has outpaced the national average by 14.1 per cent in the past decade, and that growth is being driven by two powerful forces.

Research by Ray White senior data analyst Atom Go Tian found that people escaping expensive city prices for lifestyle benefits, and the boom-bust cycles of commodity markets, were behind the rapid growth in regional home prices.

“The affordability story started before the pandemic, as Sydney and Melbourne buyers sought coastal and country alternatives,” he said.

“The pandemic accelerated this trend when remote work made regional living more viable for city workers.

“The commodity story is different as it is tied to global demand for Australia’s resources like iron ore, coal, and lithium.

“When prices are up, mining towns boom. When they fall, these communities struggle.”

National home price growth. Source: Ray White

Mr Tian said that for the first half of the last decade, price growth between regional and national Australia were relatively similar with regional Australia performing only 2.4 per cent better than national.

However, the pandemic was a key turning point.

“From 2020 onwards, house price growth in regional Australia began to diverge from national house price growth as a combination of affordability-driven lifestyle migration and commodity cycle booms,” he said.

“Between 2015 and 2020, regional house prices have grown 98.8 per cent to $688,000, while national house prices have grown only 84.7 per cent to $950,000.

“As it stands regional house prices represent just 72 per cent of national house prices, up from around 65 per cent historically and the closest this price gap has ever been.”

Ray White senior data analyst Atom Go Tian.

Looking forward, Mr Tian said that the transformation of regional Australia from 2015-2025 revealed two distinct growth engines rather than a single regional market.

“Affordability-driven migration powered NSW and Victoria’s early success, then spread to South Australia as those markets became expensive,” he said.

“Buyers seeking lifestyle benefits at lower prices have driven sustained demand in coastal and country areas.

“Commodity cycles created the dramatic swings in Queensland and WA’s mining regions. These areas declined when prices fell, then surged when global demand for Australia’s resources recovered.

“As regional prices rise closer to city levels, successful regional markets are becoming less about being cheap alternatives and more about offering genuine economic opportunities alongside lifestyle benefits.”

HOW THE REGIONS COMPARED

Regional NSW: “Growth has slowed”

Regional NSW was an early standout performer, growing 18.3 per cent between 2015 and 2019, the research found.

Sydney’s high prices drove buyers to seek coastal and country alternatives in areas like the Southern Highlands, Byron Bay, and Newcastle.

Aerial view of Cape Byron at Byron Bay, istock

“Strategic infrastructure investments helped accelerate this trend,” Mr Tian said.

“The Rebuilding NSW program, Pacific Highway improvements, and regional rail upgrades made these areas more accessible and attractive to city buyers.

“This early momentum paid off during the pandemic, with regional NSW achieving strong 51.7 per cent growth as the lifestyle shift accelerated.

“Post-pandemic, growth has slowed but remains solid at 13.0 per cent between 2023 and 2025.”

Regional NSW

Regional Victoria: “Market exhaustion”

Regional Victoria saw the strongest pre-pandemic growth of any regional market with 24.2 per cent increase in house prices from 2015 to 2019.

Like NSW, Melbourne’s affordability pressures drove buyers to areas like Geelong, Bendigo, Hume, and Ballarat.

“Early infrastructure investments also worked to position Victoria perfectly for the pandemic lifestyle boom, matching NSW with virtually identical 51.5 per cent growth,” Mr Tian said.

“However, Victoria now shows clear signs of market exhaustion.

“Post-pandemic growth has been the weakest nationally at just 3.1 per cent between 2023 and 2025.

“This sharp decline reflects Melbourne’s broader market cooling that has reduced the metropolitan spillover effect that drove much of the regional demand.

“Victoria faces more severe capacity constraints than NSW’s more geographically diverse regional markets.”

Regional Victoria

Regional Queensland: “Exploded”

Regional Queensland’s house market tells two distinct stories: the boom-and-bust cycles of mining towns and the steady rise of premium coastal areas.

Before the pandemic (2015-2019), the region barely grew at just 1.5 per cent.

The Gold Coast and Sunshine Coast performed well with 12 per cent and 14 per cent growth respectively.

But mining areas like Central Queensland, Townsville, and Mackay declined by around 10 per cent.

Townsville’ property market is now booming. Picture: Supplied

“During the pandemic, coastal markets exploded,” Mr Tian said.

“The Gold Coast and Sunshine Coast saw massive growth of 56 per cent and 58 per cent. “Mining regions also bounced back strongly with 31 per cent growth as the economy shifted.

“After the pandemic, coastal growth continued but slowed to a more sustainable 26 per cent for the Gold Coast and 22 per cent for the Sunshine Coast.

“Meanwhile, mining regions hit their stride. As commodity prices recovered, these areas saw their best performance in a decade with 50 per cent growth between 2023 and 2025.”

Mr Tian said that this combination of coastal stability and mining recovery drove overall regional Queensland post-pandemic growth of 37.4 per cent, positioning it to become Australia’s most valuable regional property market.

Regional Qld

Regional Western Australia: From population exodus to housing shortage

Regional WA demonstrates dramatic commodity cycle volatility.

The state shows the strongest post-pandemic growth at 45.2 per cent following a severe pre-pandemic decline of -11.8 per cent.

“When iron ore prices collapsed from 2014-2019, it devastated regional economies,” Mr Tian said.

“Towns that relied on mining services and agricultural exports to China saw their populations shrink.

“The current surge reflects iron ore recovery and WA’s emergence as a critical lithium supplier for global battery production, alongside traditional agricultural export strength.

“Regional WA communities that experienced population exodus now face acute housing demand from returning mining workers, creating genuine supply-demand imbalances driving price growth.”

Regional WA

Regional Tasmania: Like Victoria, the market is exhausted

Regional Tasmania saw the second-strongest pre-pandemic growth nationally at 30.2 per cent between 2015 and 2019.

This growth began as part of Australia’s broader trend of affordability-driven lifestyle migration.

“Mainland buyers, particularly from Sydney and Melbourne, found they could access significantly lower house prices in regional cities like Launceston, Burnie-Ulverstone, and Devonport with strong lifestyle appeal,” Mr Tian said.

“This early momentum accelerated dramatically during the pandemic, with regional Tasmania recording the highest pandemic growth of 74.4 per cent.

“Remote work made the island’s geographic isolation irrelevant for many professionals, while its clean environment and outdoor lifestyle became highly desirable during lockdowns.”

However, like Victoria, Tasmania now shows signs of market exhaustion.

Post-pandemic growth has slowed to just 2.4 per cent between 2023 and 2025, the second-weakest performance nationally after Victoria.

“This decline reflects Tasmania’s unique constraints,” Mr Tian said.

“Unlike mainland states, the island has limited land suitable for development, restricted transport links, and a small local economy.

“At current prices of $553,000, still below national house prices but up dramatically from pre-pandemic levels, regional Tasmania has priced out many local buyers while reaching affordability limits for mainland migrants.

“The market appears to have absorbed the initial wave of lifestyle-seeking buyers, with few new arrivals to sustain growth momentum.”

Regional Tasmania

Regional South Australia:Escape valve

“SA represents a third distinct pattern within Australia’s regional narrative,” Mr Tian said. “Regional SA’s minimal pre-pandemic growth (0.06 per cent) reflects economic challenges including disproportionate impact from automotive industry closures, sustained population outflow to eastern states, and limited economic diversification.

“Before the pandemic, regional SA remained largely stagnant as young people migrated to higher-opportunity markets.”

However, current acceleration (43.0 per cent post-pandemic) positions SA as the affordability escape valve for buyers priced out of NSW and Victoria’s regional markets, the research said.
“As those markets matured and became expensive, buyers discovered SA offered comparable lifestyle benefits at substantial discounts while maintaining economic stability,” Mr Tian said. “The evolution of wine regions like Barossa Valley toward premium products, combined with defence industry expansion in centres such as Adelaide Hills, has created diverse economic foundations supporting sustained demand.”

Ray White graphs

Regional NT: Stuck on Struggle Street

Regional NT represents Australia’s most challenged regional market, with consistently weak performance including pre-pandemic decline (-3.3 per cent), the lowest pandemic growth nationally (14.5 per cent), and near-stagnant post-pandemic performance (0.9 per cent), the report revealed.

“Unlike SA’s successful positioning as an affordability alternative, NT’s low house prices at $467,000 haven’t translated into buyer interest,” Mr Tian said.

“Suggesting that affordability alone cannot drive regional market performance without accompanying lifestyle amenities, economic opportunities, or geographic accessibility that characterise successful regional markets elsewhere.”