WA regional centres post the fastest quarterly gains nationwide
Regional Australian property markets are outpacing their capital city counterparts, with dwelling values rising 3.2% over the three months to January, compared with 2.1% across the combined capitals, according to Cotality’s February Regional Market Update.
The report, released Wednesday, found growth in regional areas had accelerated from 3% in October, while capital city markets slowed from 3.3% over the same period. Cotality attributed the shift to affordability pressures, renewed internal migration, and tighter competition for homes outside major cities.
Gerard Burg, Cotality’s head of research for Australia, said the results pointed to a widening gap between city and regional markets.
“Affordability remains a powerful driver of buyer behaviour. With capital city prices still near record highs and stock levels tight, many households are once again looking to regional Australia for greater value and liveability,” Burg said.
“We’re seeing momentum build across a wide range of regional markets, from inland hubs to coastal centres and mining-adjacent regions.”
Western Australia regional centres lead gains
Regional Western Australia led all states, recording a 6.1% rise in values, up from 4.9% in the previous quarter. Albany (7.7%), Kalgoorlie-Boulder (7.6%), and Busselton (7.0%) were the standout performers within the state. Wagga Wagga in New South Wales posted the strongest quarterly result of any individual market nationally, at 8.1%.
Queensland and South Australia also recorded improved conditions, led by Toowoomba, Bundaberg, and Cairns in Queensland and Victor Harbor–Goolwa in South Australia.
Growth was more subdued in New South Wales (2.5%) and Victoria (2.3%), which were the only states to record localised value declines. These included Bowral-Mittagong (-2.1%), Warrnambool (-0.4%), and Batemans Bay (-0.4%). Burg noted that time on market in two affected NSW localities was close to 70 days, suggesting looser supply and demand conditions than in most other regional areas.
Selling conditions were tightest in Western Australia and Queensland, where median time on market was 20 and 24 days, respectively, and vendor discounting averaged 3.3% in both states. Albany recorded the shortest selling time nationally at just 10 days.
Regional rents also rose faster than city rents, up 1.6% for the quarter against 1.4% for the capitals. Over five years, regional rents have climbed 41.9%, far outstripping wage growth of 17.5%.
“As with their city counterparts, rental affordability has deteriorated for residents in the regions. Cost pressures and labour shortages have held back supply across the country, and the stock of regional homes hasn’t expanded fast enough to absorb the added demand from internal migration away from the capitals,” Burg said.
Tasmania recorded some of the fastest rental increases, with Devonport rising 5.0%, Launceston 4.3%, and Burnie-Somerset 3.2%. Albany led annual rental growth nationally at 16.9%, followed by Devonport at 11.8%.
Notable decline of capital cities in late 2025
National property values continued to show resilience through 2025 and into 2026. Total residential real estate market value in Australia reached about $12.4 trillion in January 2026, with national dwelling values rising 2.4% in the early part of the year, a pace supported by sustained demand amid a slowing broader market.
Major capital city markets – particularly Sydney and Melbourne – showed signs of easing. Both cities experienced slower movements in late 2025. In December, both property markets recorded a 0.1% decline, the first fall since January 2024.
The divergence among capitals also became pronounced through 2025. The latest property market reviews noted that Perth delivered strong gains while Melbourne lagged, underlining uneven momentum across metro centres. Growth forecasts for 2026 pointed to continued expansion in some capital markets, driven by strong demand and lower interest rate expectations.
Broader market outlooks late last year predicted that house prices generally would continue to rise in 2026, supported by record high prices, potential policy support, and persistent demand, though not uniformly across all states and cities.
