The best and worst regional housing markets

Queensland's coastal region of Mackay-Isaac-Whitsunday has raced to the top of the non-metro property leaderboard, outperforming all other regional markets with 5.9 per cent capital growth over the past 12 months, boosted by the improving local economy, and fuelled by high commodity prices and rising activity in the mining sector.

The CoreLogic Quarterly Regional Market Update, which analysed 25 of Australia's largest non-capital city regions, also named Bunbury in WA, Ballarat in Victoria and NSW's Central West as the country's best performing regions during the same period.

“Overall, our latest data points to an increase of value growth in regional markets, particularly those which are located adjacent to capital cities," said Tim Lawless, head of research at CoreLogic.

"As people are priced out of certain capital cities, buyers now appear to be looking to these adjacent regions.

"Home owners in Sydney and Melbourne have seen a substantial rise in housing equity over recent years. Subsequently, we are seeing some evidence that these buyers are starting to look for holiday and investment properties in certain regional markets which is also providing an impetus for some of the value growth we are currently seeing."

In tropical Queensland region Mackay-Isaac-Whitsunday, Mr Lawless said both sales volumes and house values have bounced back.

"We've seen local economic conditions improving on the back of high commodity prices, low Australian dollar and rising activity in the mining sector," he said.

"The growing demand for lifestyle homes also helped push prices higher."

In Bunbury, located 180 kilometres south of Perth, sales volume has risen by 0.8 per cent, the highest rate recorded by a regional centre in the country during the year.

"The lifestyle and affordable price points are the main drivers in this market," said Mr Lawless.

"A typical house in the area is selling for around $373,000, which is tremendous value for a beautiful coastal market.

"Bunbury is relatively accessible from Perth, Australia's fourth largest capital city. There's also improved flights coming into the regional airport which should help to improve accessibility to that market."

In Ballarat, located 148 kilometres from Melbourne, houses were selling the fastest across regional markets amid strong buyer competition.

On average, houses were snapped up within 33 days, compared to the national average of 90 days.

Mr Lawless said affordability and accessibility have boosted demand in the region.

"Affordability is a big factor in pushing the buyers outside of the capital cities," he said.

"There's also the fact that if you're in a market like Ballarat or Geelong or Bendigo, you can commute back into the major job centres like Melbourne if that's what you need to do."

Worst performers

In contrast, CoreLogic named the Illawarra region,  100 kilometres south of Sydney, as the country's worst performing region with house values dropping by 5.9 per cent during the year to October.

Vendors were also forced to discount their houses by 6.4 per cent on average. Homes were taking 58 days to sell in the current market, compared with just 43 days a year ago.

Sales volumes were also lower, with transactions falling by 5.4 per cent over the year.

Mr Lawless said the weak numbers reflected the overall poor performance of the property markets during the past 18 months.

He said  indicators have started to trend up with prices in Illawarra rising by 4.2 per cent during the past three months to November.

Latrobe-Gippsland, 140 kilometres east of Melbourne, was another poorly performing region in CoreLogic's list.

Sales volume tumbled by 22.1 per cent – the largest decline across all regions as population continues to fall amid a slowing local economy.

NSW lifestyle regions  the Southern Highlands & Shoalhaven were the slowest markets to sell a property, taking 101 days on average.

Townsville in Queensland was the worst market for vendors, according to CoreLogic. On average, vendors were offering 11.1 per cent discounts to get a sale.