Similarly , fixed mortgage rates are starting to creep up , even though official rates remain on hold . most extreme has been the change in price acceleration in Regional New South Wales and Sydney .
A bigger impact on pricing would be significant restrictions put in place by APRA , or alternatively a move by the Reserve Bank of Australia to increase rates . For now , inflation does appear to be under control but any sustained significant increase to this would likely put very low interest rates at risk .
4 . Regions still hot but movement in activity back to capital cities
For decades , government policy has aimed to move people out of congested capital cities and into regional Australia . While this has had some success , it was nowhere near as successful as COVID . In 2020 we saw the highest level of net migration into regional areas ever recorded and this led to a significant increase in prices .
Since the start of the year , we have seen this price growth continue in regional areas , however capital cities have taken off far more quickly than they did in 2020 . At the
In the last five months of 2020 , Sydney house prices only increased by two per cent but shot up 15 per cent in the first five months of 2021 . Regional New South Wales also saw a similar trend but the change in the growth rate wasn ’ t as pronounced , moving from six per cent last year to 12 per cent this year . Regional area growth has been far more consistent over COVID than capital cities .
How will this change over coming months ? A return to more normal conditions will mean more people need to get back into the office and for many this will make regional living a little more difficult . As a result it ’ s likely that it will be those areas that are within commuting distance from capital cities that do the best .
Other drivers of regional price growth such as our booming iron ore sector and strong agricultural conditions will continue . For towns reliant on these , it will mean that strong price growth continues .
CHANGE IN RATES OF GROWTH End of 2020 compared to start of 2021
Capital Cities and Regional Areas |
July-Dec 2020 |
Jan-May 2021 |
Difference in growth rate |
Greater Sydney |
2 % |
15 % |
13 % |
Greater Melbourne |
-1% |
9 % |
10 % |
Rest of VIC |
3 % |
11 % |
8 % |
Greater Hobart |
5 % |
11 % |
7 % |
Australian Capital Territory |
5 % |
11 % |
7 % |
Greater Brisbane |
3 % |
10 % |
7 % |
Rest of NSW |
6 % |
12 % |
6 % |
Rest of TAS |
6 % |
12 % |
6 % |
Rest of QLD |
5 % |
10 % |
5 % |
Rest of WA |
1 % |
5 % |
4 % |
Rest of NT |
3 % |
8 % |
4 % |
Greater Perth |
3 % |
7 % |
4 % |
Rest of SA |
4 % |
8 % |
4 % |
Greater Adelaide |
5 % |
8 % |
3 % |
Greater Darwin |
8 % |
12 % |
3 % |
Source : Corelogic , Ray White 9