Regional housing markets continue to demonstrate measurable strength relative to their capital city counterparts, reinforcing a decentralisation trend that has been building for several years. In the three months to January, dwelling values across regional markets increased by 3.2%, comfortably exceeding the combined capital city growth rate of 2.1% over the same period. This performance differential confirms that demand patterns remain structurally supportive of non-metro locations.
The latest Cotality Regional Market Update highlights Wagga Wagga in New South Wales as the strongest quarterly performer, recording an 8.1% increase in dwelling values. Albany in Western Australia followed at 7.7%, while Launceston in Tasmania rose by 7.4%. Victor Harbor-Goolwa in South Australia recorded 6.4% growth, Ballarat in Victoria increased by 5.8%, and Toowoomba in Queensland lifted 5.7%. The geographic diversity of these results demonstrates that strength is not confined to a single state or economic zone.
Selling conditions reinforce this resilience. Regional Western Australia and Queensland are experiencing median days on market of just 20 and 24 days respectively. Vendor discounting in both markets is holding at 3.3%, signalling firm pricing power and relatively balanced negotiations. When properties transact quickly and discounting remains limited, it typically reflects sustained buyer competition and constrained stock levels.
Sales activity across regional markets has been mixed overall; however, Victoria recorded the strongest annual uplift, with transaction volumes rising almost 27% year on year. This surge indicates renewed confidence in selected regional Victorian centres, particularly those supported by transport links, employment diversity and ongoing population inflows.
Affordability remains one of the primary drivers. Many regional markets continue to offer lower entry prices compared to capital city equivalents, even after several years of price growth. Buyers seeking larger land parcels, lifestyle flexibility and relative value are continuing to consider regional alternatives. Hybrid and remote work models have further reduced geographic constraints, allowing professionals to maintain metropolitan incomes while residing outside major capitals.
Infrastructure investment is another critical factor. Upgrades to highways, healthcare facilities, schools and digital connectivity have materially improved the liveability of many regional hubs. These enhancements increase economic resilience and help sustain housing demand beyond cyclical fluctuations.
Looking forward, the sustainability of this 3.2% quarterly growth will depend on employment conditions, infrastructure execution and housing supply responsiveness. However, the continued gap between regional growth (3.2%) and capital city growth (2.1%) suggests that regional markets are now a central pillar of national housing performance rather than a secondary alternative.
