COVID-19 has certainly brought about a re-examination of lifestyle and priorities for many. The property industry in regional areas of Australia saw a good deal of activity over the past three years as people recognised their ability to work remotely and made the choice to live in areas with a little less freneticism than the major Australian business centres of Sydney and Melbourne. Capital city markets like Adelaide, Brisbane and Hobart also benefited for the same reasons.
In particular, the South East region of South Australia saw significant growth of 21.7% in house values over the 12 month period to October 2022, according to data released this month by Core Logic. This was the best performing regional area in the country. The close proximity of the South East region no doubt increased its attractiveness to Victorians either as a permanent residence or as a holiday location. Activity in the South East was 23.4% above the 5 year average for the region in terms of the number of sales that took place in the 12 months to August 22.
In somewhat of a twist, the NSW Southern Highlands and Shoalhaven region performed very poorly. Traditionally popular among retirees for a permanent residence as well as Sydney-siders seeking a weekender, the number of sales for the twelve months to August 22 was 28.3% lower than a year ago. This region recorded a 27.5% drop in house values in the year to October 22. The situation was even more dire for the unit market which recorded negative growth of 35.8%. The Southern Highlands and Shoalhaven region was the darling of early COVID-19 activity and experienced 30%+ growth between the April 2020 quarter and that of January 21. But between the January 21 quarter and October 22, the decline was very sharp.
Is there any growth left in the South East region of South Australia? The quarter to October 22 saw a slight decline in recorded house values from sales in that quarter compared with the peak to the June 22 quarter so it does seem that the tide is turning. Countering the continuation of a downward trend is time on market and vendor discounting figures which are actually healthier than those of October 2021. This suggests that things are still healthy in the South East and that we’re more likely to see a correction than a downward spiral. We’ll await the December quarter data with interest.