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Posted: 2024-05-27 08:08:57

The promise of fleeing the high cost of living in Australia's capital cities and finding reprieve in the regions is fast evaporating, with rental prices in nearly every part of the country hitting record highs.

Real estate analysts CoreLogic found rents in three quarters of Australia's biggest regional areas were now higher than ever.

Batemans Bay in New South Wales had the biggest increases over the past three months, with rents going up the equivalent of $32 a week, or 6 per cent.

Bunbury in Western Australia and the Sunshine Coast in Queensland each had rental prices increase by more than 4 per cent in recent months, with Bunbury prices increasing by 20 per cent in the past year alone.

A building on a beach on a sunny day

Rent increases on Queensland's Sunshine Coast are among the highest in the country.(ABC Sunshine Coast: Owen Jacques)

Across the country, there was not a single major regional centre that recorded a significant fall in rental prices.

Where the rent did fall, it was by a tiny amount.

The Pilbara mining hub of Karratha in WA fell 0.8 per cent to an average rent of more than $1,000, while the Maryborough in Queensland fell by 0.2 per cent to $478.

Costs 'pushed through' to renters

CoreLogic economist Kaytlin Ezzy said rental prices rarely went backwards unless forced down by an economic slowdown, but the increases were still unusual.

A squid sculpture by the water with boats in the background.

Batemans Bay recorded the highest rent increase over three months, rising the equivalent of $32 a week.(ABC South East: Keira Proust)

"We're seeing rents rise at a pace much facer than the sort of typical pace, pre-COVID," she said.

"Rents are rising at about 6 per cent across combined regional markets at a time when you would typically see rents rise annually by 2 per cent.

"So it's a much faster pace of growth across rental markets, which has taken most of those markets back to record highs."

Head and shoulders photo of blonde woman in glasses wearing dark jacket.

CoreLogic's Kaytlin Ezzy said rents in nearly all major regional areas were now at record levels.(Supplied: CoreLogic)

She said another likely reason was consistently high interest rates, which have remained above 4 per cent after steadily rising since 2022.

"[That is] putting a lot of pressure on both renters and also your investors," Ms Ezzy said.

"Having to continue to service those higher mortgage costs are likely seeing some of that excess interest rates being pushed through to your renters."

Renting across biggest 50 regions

LocationStateAvg rent ($)Qtr changeAnnual 

Batemans Bay

NSW

570

6.0pc

-2.4pc

Bunbury

WA

627

4.7pc

16.4pc

Sunshine Coast

QLD

766

4.4pc

7.1pc

Gladstone

QLD

499

3.9pc

12.9pc

Forster-Tuncurry

NSW

569

3.7pc

3.6pc

Geraldton

WA

475

3.6pc

13.0pc

Mount Gambier

SA

432

3.5pc

7.8pc

Mackay

QLD

603

3.4pc

12.7pc

Morisset-Cooranbong

NSW

596

3.4pc

6.0pc

Goulburn

NSW

467

3.2pc

-0.1pc

Newcastle-Maitland

NSW

628

3.1pc

5.4pc

Townsville

QLD

507

2.9pc

8.9pc

Lismore

NSW

553

2.9pc

6.7pc

Burnie-Somerset

TAS

419

2.9pc

7.4pc

Traralgon-Morwell

VIC

422

2.9pc

6.6pc

Gold Coast-Tweed Heads

QLD

827

2.9pc

7.9pc

Busselton

WA

723

2.8pc

14.8pc

Hervey Bay

QLD

571

2.7pc

9.6pc

Albany

WA

516

2.7pc

13.6pc

Taree

NSW

474

2.7pc

4.4pc

Mildura-Buronga

VIC

442

2.6pc

7.7pc

Cairns

QLD

591

2.5pc

6.7pc

Orange

NSW

542

2.4pc

6.4pc

Rockhampton

QLD

498

2.4pc

4.4pc

Warragul-Drouin

VIC

512

2.3pc

8.5pc

Port Macquarie

NSW

606

2.3pc

3.7pc

Geelong

VIC

524

2.2pc

3.6pc

Wollongong

NSW

692

2.2pc

4.6pc

Albury-Wodonga

NSW

502

2.1pc

4.9pc

Launceston

TAS

491

2.0pc

0.6pc

Devonport

TAS

436

1.9pc

4.3pc

Coffs Harbour

NSW

650

1.8pc

1.9pc

Bathurst

NSW

490

1.8pc

4.3pc

Bundaberg

QLD

540

1.7pc

9.9pc

Ballina

NSW

740

1.7pc

5.6pc

Nelson Bay

NSW

610

1.4pc

4.6pc

Bowral-Mittagong

NSW

722

1.4pc

1.1pc

Wagga Wagga

NSW

493

1.2pc

5.6pc

Shepparton-Mooroopna

VIC

472

1.2pc

7.4pc

Bendigo

VIC

466

1.1pc

6.1pc

Victor Harbor-Goolwa

SA

498

1.0pc

12.4pc

Tamworth

NSW

447

1.0pc

5.1pc

Toowoomba

QLD

519

0.9pc

6.2pc

Kalgoorlie-Boulder

WA

614

0.6pc

6.1pc

Ballarat

VIC

425

0.4pc

4.2pc

Warrnambool

VIC

524

0.3pc

7.1pc

Dubbo

NSW

484

0.1pc

3.6pc

St Georges Basin-Sanctuary Point

NSW

557

-0.1pc

1.2pc

Maryborough

QLD

478

-0.2pc

7.5pc

Nowra - Bomaderry

NSW

576

-0.3pc

2.5pc

Regional Victoria 'worst performers'

Beyond the rental market, the CoreLogic data also examined house prices across the country's biggest regional areas.

A high angle view of Ballarat's main street.

Property prices in Ballarat have fallen but it may be due to a better supply of housing than some areas.(supplied: City of Ballarat)

Western Australia dominated the quarterly numbers with Geraldton going up 8.8 per cent in three months, followed by Busselton (7.7pc) and Bunbury (6.4pc).

Homes in Bunbury also sold the fastest at an average of 14 days.

Queensland's Rockhampton, Gladstone, Gold Coast-Tweed and Townsville were among the top 10 for quarterly growth, while New South Wales and Victoria had just one spot each.

The worst performing regional areas for house prices over recent months were Ballarat, outside Melbourne, and Port Macquarie on NSW's Mid North Coast.

Port Macquarie and Ballarat house prices fell 2 per cent in the past three months.

A busy street in Ballarat with old buildings on either side and cars on the street.

The average price of a Ballarat home is now about $541,000 after falling slightly over recent months.(ABC Ballarat: Christopher Testa)

Ballarat was also down 4.2 per cent in the past year, with average home prices now hovering at just over $540,000.

"Regional Victoria has been sort of one of the worst performers over the past couple of months," Ms Ezzy said.

But she added it could simply be because there was not the same lack of homes that had been plaguing other areas.

"They don't have the mismatch of supply and demand that's supporting values across the rest of the country," Ms Ezzy said.

She said while most places might have far fewer homes on the market, regional Victoria had 15 per cent above average.

Ms Ezzy said aside from WA properties that were "leaving everybody in the dust", Queensland was the next top contender for value growth.

"Gladstone and Emerald and Rockhampton have seen some of the strongest growth over the past year. In fact, Rockhampton values are up about 16 per cent over the past year alone," she said.

View of landscape and bendy river from a mountain

Mount Archer property prices have been among the strongest in the country over the past three months.(ABC Capricornia: Katrina Beavan)

She said the consistent increase in property prices seemed "a bit contrary" given cost-of-living concerns, high interest rates and low consumer sentiment.

"[They] are all things that are generally correlated with a falling market," Ms Ezzy said.

"But at the moment the mismatch between that supply and demand is kind of outweighing some of those more negative factors, and pushing values higher when most other factors say they should be falling."

Open for lease sign on footpath outside a property in Canberra.

Rental prices have been increasing significantly across Australia and it's not just in the capital cities.(ABC News: Alexandra Beech)

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