Regional Markets Heating Up as City Growth Slows
Recent data show regional home prices are outpacing the capitals, driven by buyers chasing affordability and lifestyle. Dwelling values in regional Australia jumped about 3.2% in the three months to January, versus just 2.1% across combined capital cities. Growth is broad-based – Western Australia led with +6.1% (the largest of any state), and inland Wagga Wagga surged ~8.1% in that quarter. By contrast, NSW and Victoria saw much slower gains (around 2.5%), and even a few small regional centres recorded slight declines.
Sales are sizzling outside the cities. In WA and Queensland, homes are selling in a matter of weeks – median time on market is only about 20–24 days – with vendors rarely discounting (around 3.3% off asking price). For example, Albany WA saw homes snapped up in just 10 days on average. All this means homebuyers must move faster: delayed finance approvals risk missing out in these tight regional markets.
Rents are rising fast too, adding pressure on budgets. Regional rents grew 1.6% in the latest quarter (slightly above 1.4% in cities). Over the past 5 years, rents in the regions have shot up ~41.9%, far ahead of wage growth (~17.5%). In practical terms, renting is becoming less affordable for many households. For borrowers, higher rents and living costs can crimp borrowing power and serviceability, especially if banks start stress-testing on rental expenses.
What It Means for Brokers and Borrowers
- Affordability-driven shifts: Expect more borrowers (especially first-home and downsizers) to seek regional loans. Highlight regional options to clients facing city price hurdles. Emphasise the home-buying schemes (eg. 5% deposit for first-timers) now fuelling demand outside metros. [Learn about our First Home Loans service for guidance.]
- Pre-approval urgency: With fast sales, advise clients to get home loan pre-approval before making offers. A quick, “clean” pre-approval from a broker can seal the deal when markets heat up. This also signals to sellers that your borrower is ready and serious. Check here how we can help secure a solid pre-approval.
- Loan structuring for regional buyers: If clients plan new builds or purchase in remote areas, explore tailored loan structures. Construction loans or staged-release (drawdown) mortgages may be needed for off-the-plan homes. Investor clients should consider loans with flexible interest and repayment settings to maximise rental yields. Our Investing in Property team can advise on optimising loan mixes and LVRs for investment properties.
- Credit assessment: With RBA rates still higher for longer, focus on clients’ complete financial picture. Lenders will scrutinise incomes, rental commitments and debt levels more closely.
How OM Financials Can Help
Regional markets offer new opportunities – more house for less money, and attractive rental yields for investors – but also new challenges for borrowers and brokers. As your mortgage partner, OM Financials is ready to help you navigate these changes. Our brokers specialise in crafting loan solutions for regional buyers: whether it’s boosting borrowing power with the right LVR strategy, structuring a construction or investment loan, or crunching the numbers for serviceability, we have the tools and lenders on our panel to match your client’s needs.Want to proceed? At OM Financials, we make the home loan process simple and guide you every step of the way. Speak with our brokers today to understand your (or your clients’) borrowing power in this shifting market. Feel free to book a free consultation or contact us anytime at 0478 876 967. We’ll help you move forward with confidence. Feel free to follow us on LinkedIn and Instagram.