Regional Housing Outperforms Capitals Despite Broad Slowdown

Across Australia’s 50 largest regional Significant Urban Areas (SUAs), 47 experienced slower growth relative to the preceding quarter, with 22 recording a decline in home values.

Cotality head of research, Australia Gerard Burg said that although regional markets continued to outperform the capitals, they were not immune to the broader housing market slowdown.

“Relative affordability continues to attract buyers to many regional markets and support internal migration from the capitals,” Burg said..

“However, softer buyer demand is becoming more evident across the country, with fewer markets recording the strong growth seen earlier this year.”

Western Australia and South Australia continued to record the strongest quarterly growth nationally, with home values increasing 2.1 per cent across both.

Kalgoorlie-Boulder and Geraldton had the strongest quarterly growth in Western Australia with 6.4 per cent and 3.8 per cent respectively, while Port Pirie led South Australia with a 6.7 per cent gain.

“Regional markets have consistently outperformed the capital cities since housing conditions began to soften in late 2025, but even the regional markets are now being impacted by the broader market slowdown,” Burg said.

Regional Markets: Values

▲ Source: Cotality

The momentum of the previously high-performing south-west areas of WA had begun to ease as the state’s strongest growth was increasingly concentrated in more affordable regional centres.

“We’re no longer seeing growth concentrated in the lifestyle markets that benefited most from spillover demand we saw during the market’s prolonged upswing,” Burg said.

 “Instead, buyers are gravitating towards regional centres where their dollar stretches further and local demand is supporting housing values.”

Over the quarter, home values in regional Queensland stagnated, while values fell across that state’s south-eastern markets for the first time since early 2023.

The Gold Coast, Sunshine Coast and Cairns all recorded declines—0.8 per cent, 0.5 per cent and 0.6 per cent respectively—offsetting gains of 2 per cent in Maryborough, 1.6 per cent in Gladstone and 1.2 per cent in Townsville.

“Queensland has been one of Australia’s standout regional performers over the past few years, but we’re starting to see a more selective market emerge.”

“As higher-value markets lose momentum and buyers become more cautious, we’re seeing demand swing to more relatively affordable regional centres.”

Reflecting the softer housing markets across Sydney and Melbourne, New South Wales and Victoria recorded the weakest conditions nationally.

The greatest declines across regional New South Wales were at Coffs Harbour ( down 3.3 per cent), Goulburn (-3.2 per cent) and Nelson Bay (-3 per cent). Geelong (-1.2 per cent) and Warragul-Drouin (-1.5 per cent) were the largest falls in Victoria.

▲ Bowral in NSW had the softest selling conditions with residential properties on the market for a median of 86 days. 

Inland markets including Dubbo, Tamworth and Albury-Wodonga continued to record comparatively strong growth with 3.9 per cent, 2.2 per cent and 2 per cent respectively.

Across most of Regional Australia, selling conditions softened during the quarter, as the median time spent on market grew across 44 of the nation’s 50 largest SUAs.

Selling conditions remained strongest in Western Australia, where Kalgoorlie-Boulder led as the nation’s fastest-selling regional market with a median time on market of 11 days. It was followed by Albany at 16 days, as well as Geraldton and Bundaberg, both averaging 18 days.

Bowral-Mittagong registered the softest selling conditions with residential properties on the market for a median of 86 days. 

Burg said rental conditions had become less competitive compared tothe peak of the rental shortage, although supply remained constrained across many regional markets.

Growth in regional rent values slowed to 1.1 per cent in the three months leading into July, tempering from 1.8 per cent in the preceding three months and coming in just under the 1.2 per cent rise observed in the combined capital cities. 

Regional vacancy rates were 1.9 per cent in July, in comparison to the 1.7 per cent seen across the combined capitals.