could pose a bigger threat to the regional housing markets than the looming interest rate rises, although worsening affordability could also accelerate price falls as some regions become more expensive than the capitals, experts say.
“I don’t see a 25-basis point interest rate increase as having a major impact on the regional housing markets, but the return to the office could be a major threat to regional house prices,” he said. “There are likely some more expensive regional markets which are already seeing a slowdown in momentum, even if they are a while off price falls such as the Southern Highlands-Shoalhaven regions, Illawarra and Geelong which have seen a slowdown in short-term growth rates.”
“There may be some room left for growth amid rate hikes in more affordable, peripheral areas of the high-end coastal hot spots, but I don’t think there will be too many regions avoiding a downswing over the next few years,” she said.since the start of the pandemic has also eroded affordability – one of the regions’ biggest advantages over the capitals.
“Since then, median prices in five regional areas have overtaken not just Perth but also Darwin and Adelaide. These are Hunter Valley, Ballarat, Bendigo, Latrobe-Gippsland and south-east Tasmania.
A desire for work-life balance will not be influenced by whether there is ongoing COVID pandemic disruption to office work - the pandemic was merely a platform to achieve that balance for many people. This will continue with or without COVID I think.