In Data We Trust

Regions VS The Big Smoke

COVID was said to have triggered a move from the cities to more regional markets. Here are some charts to show exactly what did happen and whether regional markets are still worth an investor’s attention.

The following 5-year growth chart shows the top 4 significant urban areas in NSW. Sydney is at the bottom in crimson.

You can see that the regional markets followed a very similar growth path. And they all comfortably outperformed Sydney.

BTW, these growth curves are growth in house prices only – excluding units.

The dotted black vertical line represents when COVID started making things difficult in real estate. Sydney’s growth profile was more heavily impacted by COVID than the regions.

Notice how all 4 NSW cities bottomed about 9 months before COVID. But Sydney had an extra dip after COVID commenced.


The same kind of chart for Victoria shows the same kind of thing.

Geelong, Ballarat and Bendigo started their growth run well before Melbourne’s COVID lock-downs. The black dotted line didn’t really thwart the regions’ growth and only held back Melbourne for about 9 months.


Brisbane was a different story.

In the QLD chart, it looks like prices took off in response to COVID. There are certainly no signs of a negative impact. But closer inspection shows that the Gold Coast and the Sunshine Coast started their upward move before COVID struck.


Now we’re getting into states with smaller secondary cities with thinly traded property markets. So, some growth curves get a little volatile and unreliable
It’s debateable from this chart whether South Australian regional markets outperformed their state capital over the last 5 years. But notice how 3 of the 4 cities started their upward growth path well before COVID.


Busselton was the only city with something to brag about in WA over the last 5 years.

Notice how 3 of these 4 cities started the upward growth move well before we even knew what COVID was.


It didn’t matter where you bought as a Tassie investor.
Lower interest rates came into effect in the months following COVID. These look to have accelerated the growth of Tasmanian values. But across the state it was the same story.


The growth charts don’t suggest there was a flight from COVID-closed cities to “safer” regions. The regions have gathered price gains all on their own. The pandemic may have helped a little.
Some guesses as to the cause for this regional growth:
  • Relative affordability of regional markets compared to expensive state capitals
  • Regional cities reaching a certain “critical mass” of economic diversity/job security
  • Natural growth in work-from-home opportunities or home-businesses
  • Increased pursuit of lifestyle ahead of career
  • Pandemic making crowded cities less safe

All Regions VS All State Capitals

Here’s something that shocks a lot of investors. This next chart combines all the significant urban areas that were shown in the prior charts into 2 groups.

I’ve also stretched the timeframe out to 30 years.

The state capitals have often broken away from the regions. But then the regions catch up. I’ve seen this phenomenon again and again almost every time I compare the growth of 2 property markets over a long enough period of time.


Regional markets have never been the poor cousins of their state capitals. Whether you’re looking for long-term or short-term growth, historical data suggests investors should not discredit opportunities found in regional cities.

Commentary by


Director of Select Residential Property
Founder of DSR Data

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